The average number of Americans filing for unemployment benefits over the past four weeks dropped to a 15-year low, a sign the labor market continues to strengthen.
The four-week average for jobless claims decreased to 266,250 in the period ended May 16 from 271,750, a Labor Department report showed Thursday in Washington. The figure corresponds to the week the government surveys employers to calculate the monthly payroll data. On a weekly basis, applications rose by 10,000 to 274,000.
Such a limited pace of dismissals indicates companies are anticipating a pickup in demand for their goods and services in the coming months. More job security that sparks bigger wage gains would help propel consumer confidence and make households feel more comfortable spending.
“It’s indicative of a labor market that’s showing no signs of reversal even if the pace of job growth is going to slow,” said Eric Green, head of U.S. economic research at TD Securities USA LLC in New York. Whether it’s 260,000 or 274,000, “the theme here is claims are very low.”
The median forecast of 51 economists surveyed by Bloomberg was 270,000 initial applications for last week. Estimates ranged from 264,000 to 285,000. The prior week’s claims were unrevised at 264,000.
Stock-index futures remained lower after the report, with the contract on the Standard & Poor’s 500 Index expiring in June falling 0.2 percent to 2,119.4 at 8:35 a.m. in New York.
No states estimated jobless claims last week and there was nothing unusual in the report, an agency spokesman said as the figures were released.
The four-week average of claims, which is less volatile than the weekly figure, was the lowest since April 15, 2000.
Initial jobless claims reflect weekly firings and typically decrease before job growth can accelerate. The four-week average during last month’s payroll survey week was 285,000.
The number of people continuing to receive jobless benefits decreased by 12,000 to 2.21 million in the week ended May 9, the lowest level since November 2000.
In that same period, the unemployment rate among people eligible for benefits declined to 1.6 percent from 1.7 percent the prior week, the report showed.
Many layoffs now reflect company- or industry-specific causes, such as cost-cutting or business restructuring.
Walter Energy Inc., an unprofitable coal producer, may lay off 370 salaried and hourly workers at a mine complex in Alabama amid a slump in the price of the commodity. The company notified workers at its No. 7 mine and preparation plant about potential dismissal if conditions do not improve, spokesman William Stanhouse said May 18 by phone.
The price of metallurgical coal, the steelmaking raw material that Walter mines, dropped to a six-year low as growth in China slows faster than producers cut output.
Federal Reserve policy makers are monitoring labor market progress as part of their dual mandate, which also includes an inflation target, aimed at boosting economic growth. The central bank is trying to time its first interest rate increase since 2006, a task complicated by economic data that’s weakened of late.
Officials last month didn’t expect to raise rates at their next meeting in June even as they concluded that a first-quarter economic slowdown was unlikely to persist, according to minutes of the April 28-29 Federal Open Market Committee session released Wednesday in Washington. Many of the participants “thought it unlikely that the data available in June would provide sufficient confirmation that the conditions for raising the target range for the federal funds rate had been satisfied.”