Jobless Claims Rise More Than Forecast in U.S. Holiday Week
More Americans than forecast filed applications for unemployment benefits last week as the Easter holiday period made it more difficult to adjust the data for seasonal variations.
Jobless claims increased by 24,000 to 329,000 in the week ended April 19, the most in a month, a Labor Department report showed today in Washington. The median forecast of 44 economists surveyed by Bloomberg called for an increase to 315,000. The adjustment during spring holidays is hard to quantify from year to year, a Labor Department spokesman said as the figures were released to the press.
Looking beyond the swings, firings have slowed, which probably means employers are gaining confidence the world’s largest economy is strengthening. Claims dropped to the lowest level since 2007 at the start of the month, a sign the companies are seeing string-enough sales to retain staff.
“You’re hard-pressed to make much of weekly wiggles, we still expect that the broader trend in claims will continue to hover around 300,000,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets LLC in New York, who had projected a rise to 330,000 this week. “At the end of the day, it’s encouraging that the firing side of the equation continues to show improvement, and that’s what’s been happening, even with today’s number.”
Orders placed with American factories for durable goods such as cars and computers rose more than forecast in March, pointing to faster production that will help spur the economy, a Commerce Department report also showed today. Bookings for goods meant to last at least three years increased 2.6 percent, the biggest gain since November, after rising 2.1 percent in the prior month.
Stock-index futures extended gains after the reports as better-than-estimated earnings from Apple Inc. and Facebook Inc. boosted optimism equity gains will continue. The contract on the Standard & Poor’s 500 Index expiring in June rose 0.5 percent to 1,881.9 at 8:43 a.m. in New York.
Holidays such as Easter that occur during different weeks from one year to the next make it difficult for the Labor Department to adjust the data for these seasonal variations. There were no other special circumstances last week and no states were estimated, the Labor Department said.
Economists’ estimates in the Bloomberg survey ranged from 295,000 to 335,000. The prior week’s claims were revised to 305,000 from an initial reading of 304,000.
The four-week average of claims, a less-volatile measure than the weekly figure, climbed to 316,750 from 312,000 the week before, the lowest since 2007.
The number of people continuing to receive jobless benefits dropped by 61,000 to 2.68 million in the week ended April 12, the fewest since December 2007.
The unemployment rate among people eligible for benefits fell to 2 percent in the week ended April 12 from 2.1 percent the prior week, today’s report showed.
Initial jobless claims reflect weekly firings and typically fall before job growth accelerates. Furniture maker La-Z-Boy Inc. is among companies still cutting staff.
The Monroe, Michigan-based company said in an April 16 statement that it’s firing about 100 workers as it closes plants in a company restructuring. La-Z-Boy sales growth slowed in the three months ended Jan. 25, rising 3 percent to $350.4 million, compared with a 14 percent gain in the previous quarter.
New-home sales slowed in March amid rising mortgage costs and home prices, data this week showed, which could be holding back growth in demand at home-supply and furnishing stores. At the same time, higher home values could spur consumers to invest more in their housing assets, creating demand for companies including Mooresville, North Carolina-based Lowe’s Cos Inc.
“Consumers are actually feeling good about home values and they are feeling good about their ability to do some of those key projects that have been getting pent up over the last few years,” Michael Jones, chief merchandising officer, said in a March 19 call. “We also feel pretty comfortable that some of the weather impacts from early in this quarter will flow through into some repair work as you look throughout the first quarter going into second quarter.”
Despite recent signs of slowdown in the U.S. housing rebound, the Conference Board’s index of leading indicators, a gauge of the outlook for the next three to six months, rose 0.8 percent in March, the most since November, the New York-based group said this week. U.S. growth is projected to reach 2.7 percent this year compared with 1.9 percent in 2013, according to a Bloomberg survey of economists.
Amid signs of economic improvement, the U.S. central bank announced in March a $10 billion reduction in monthly bond buying to $55 billion, having announced $10 billion reductions in purchases at its previous two meetings. The next FOMC decision is on April 30, 2014.
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