Initial Jobless Claims in U.S. Lowest Since March ’08
The number of Americans filing first-time claims for jobless benefits fell to a level matching a four-year low, more evidence the labor market is healing.
Applications for unemployment insurance decreased 2,000 in the week ended Feb. 25 to 351,000, Labor Department figures showed today. Economists forecast 355,000 claims, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls fell, while those getting extended payments also declined.
Firing is on a downward trend as employers gain confidence in the outlook for economic growth. A smaller number of job reductions also puts those companies in place to hire additional employees as demand picks up.
“Firing is not holding back the labor market,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, who forecast 350,000 claims. “Businesses recognize that they don’t need to lay off any more people. Down the road, they’re going to realize they need to hire more people.”
A separate report today from the Commerce Department showed consumer spending rose less than forecast in January after little change the previous month.
Purchases climbed 0.2 percent, while incomes increased 0.3 percent. The median estimate of economists surveyed by Bloomberg News called for a 0.4 percent increase in spending and a 0.5 percent rise in incomes.
Stock-index futures held gains and Treasury yields rose after the figures. The contract on the Standard & Poor’s 500 Index expiring this month climbed 0.3 percent to 1,368.0 at 8:56 a.m. in New York. The yield on the 10-year Treasury note climbed to 2.05 percent from 1.97 percent late yesterday.
Estimates for first-time claims ranged from 345,000 to 370,000 in the Bloomberg News survey of 49 economists. The Labor Department revised the prior week’s applications to 353,000 from the initially reported 351,000.
The four-week moving average, a less-volatile measure, fell to 354,000, also the lowest since March 2008, from 359,500.
A Labor Department official today said there was “nothing unusual” that affected today’s figures.
The number of people continuing to collect jobless benefits fell by 2,000 in the week ended Feb. 18 to 3.4 million. The continuing claims figure does not include the number of workers receiving extended benefits under federal programs.
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 16,800 to 3.38 million in the week ended Feb. 11.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 2.7 percent in the week ended Feb. 18, today’s report showed. Seven states and territories reported an increase in claims, while 44 had a decrease.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
Job creation has strengthened, with the pace of payroll growth picking up from October through January. Headcounts grew by 243,000 workers in January, the most in nine months, and the joblessness dropped to 8.3 percent, Labor Department data show.
Payrolls will increase 170,000 a month on average in 2012, according to the results of a survey by the National Association for Business Economics released Feb. 27. Last year, they rose an average 152,000 each month.
Even so, Federal Reserve Chairman Ben S. Bernanke said “the job market remains far from normal” when spoke he to U.S. House hearing on Capitol Hill yesterday. The elevated unemployment rate and a subdued inflation outlook warrant a highly accommodative stance for monetary policy, he said.
Among companies firing workers is Blizzard Entertainment, maker of the online game “World of Warcraft,” which is cutting about 600 jobs. About 90 percent of the firings will come from departments not related to video-game development, the Irvine, California-based company, a unit of Activision Blizzard Inc., said in statement on Feb. 29.
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