The number of Americans filing for unemployment benefits declined more than forecast last week, returning to a level that’s consistent with an improving labor market.
Initial jobless claims dropped 36,000 to a three-week low of 289,000 in the period ended March 7 from a revised 325,000 in the prior week, a Labor Department report showed Thursday in Washington. The median forecast of economists surveyed by Bloomberg called for 305,000 new applications.
The slump in claims indicates the elevated readings in previous weeks were probably due to companies temporarily dismissing workers because of inclement winter weather, rather than underlying weakness in the labor market. Employers in February added more workers than forecast and the jobless rate declined to the lowest level in almost seven years, the Labor Department said last week.
“This is a much bigger unwind of last week’s substantial weather hit than we expected, and it puts claims close to our estimate of the underlying trend,” Ian Shepherdson, chief economist at Pantheon Macroeconomics Ltd. in Newcastle, U.K., said in a note to clients.
Estimates in the Bloomberg survey of 49 economists ranged from 280,000 to 325,000 after a previously reported 320,000 claims a week earlier. There was nothing unusual in the data and no states estimated the number of filings, according to the agency.
Another report Thursday from the Commerce Department showed retail sales unexpectedly declined for a third month in February. Purchases fell 0.6 percent after a 0.8 percent slump.
Details for the last week of February showed winter storms and cold weather were partly to blame for the surge in jobless claims. Tennessee’s state employment agency mentioned weather as a reason behind an increase, while New York officials pointed to layoffs in education and transportation services.
The four-week average of claims, a less-volatile measure than the weekly figure, fell to 302,250 from 306,000 the week before,
The number of people continuing to receive jobless benefits declined by 5,000 to 2.42 million in the week ended Feb. 28, while the unemployment rate among people eligible for benefits held at 1.8 percent. These figures are reported with a one-week lag.
In an environment of accelerating job growth, many weekly layoffs reflect company- or industry-specific causes, such as cost-cutting or business restructuring, rather than underlying labor market trends.
The Labor Department’s February employment report issued March 6 indicated hiring remains robust. Employers added 295,000 jobs, exceeding expectations, while the unemployment rate fell to 5.5 percent.
Target Corp., the second-largest U.S. discount retailer, said March 10 that it was dismissing 1,700 workers this year as part of restructuring plan aimed to trim expenses.
The Minneapolis-based company said March 3 that it will eliminate “several thousand” jobs in the near-term, mostly at its headquarters, where it employs 13,000 people.
“It will allow us to be a much more agile, effective organization,” Brian Cornell, the company’s chief executive officer said at a news conference. “It will make us a more competitive company going forward.”