Jobless Claims in U.S. Fall to Lowest Level in a MonthMichelle Jamrisko
Applications for U.S. unemployment benefits declined last week to the lowest level in a month as the volatility typical during the year-end holidays waned.
Jobless claims fell by 2,000 to 339,000 in the period ended Dec. 28, Labor Department data showed today in Washington. The median forecast of 26 economists surveyed by Bloomberg called for 344,000 claims.
Firings will probably be limited this year as gains in business and consumer spending help the world’s largest economy strengthen. Further healing in the labor market may depend on lawmakers’ progress in budget negotiations this month, which would support confidence and a willingness to add to staff.
“The data likely won’t be free of seasonal distortions until the middle of this month,” Ian Shepherdson, chief economist at Pantheon Macroeconomic Inc. in White Plains, New York, said in a research note after the report. “For now, we’re guessing that the trend in layoffs is flat-to-slightly downwards, but we cannot be sure.”
Stock-index futures held earlier losses after the report. The contract on the Standard & Poor’s 500 Index maturing in March declined 0.2 percent to 1,836.8 at 8:44 a.m. in New York.
Estimates in the Bloomberg survey ranged from 310,000 to 385,000. The prior week was revised to 341,000 from a previously reported 338,000.
The four-week average of claims, a less-volatile measure than the weekly figure, increased to 357,250 from 348,750 in the prior week.
The number of people continuing to receive jobless benefits dropped by 98,000 to 2.83 million in the week ended Dec. 21.
The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs. Those job-seekers rose by about 58,000 to 1.39 million in the week ended Dec. 14.
Those extended benefits lapsed Dec. 28 as Congressional Democrats failed in a last-ditch effort to prolong the assistance before the House adjourned earlier in the month. Senate Democrats have pledged to consider a measure to reinstate the aid next week as lawmakers return to Washington.
Senators Jack Reed, a Rhode Island Democrat, and Dean Heller, a Nevada Republican, are seeking to renew it for three months while Congress figures out a way to cover the cost.
The expiration of the extended benefits will leave about 25 percent of jobless Americans collecting unemployment insurance payments, down from 38 percent, according to a report released by Representative Sander Levin, top Democrat on the House Ways and Means Committee.
Since 1946, when data was first collected, the share of unemployed receiving state or federal aid has never dropped below 30 percent, according to the report, which was conducted by the Congressional Research Service.
In some states the share will be even lower. Eleven percent of job-seekers in South Dakota collect jobless benefits, 16 percent in Tennessee and Georgia, 17 percent in Michigan and 18 percent in Arizona, Florida, Indiana, Ohio, South Carolina, and Virginia.
The unemployment rate among people eligible for benefits held at 2.2 percent in the week of Dec. 21, today’s report also showed.
Twenty-eight states and territories reported an increase in claims, while 25 reported a decrease. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and typically wane before job growth can accelerate. Employers added an average 188,550 jobs per month in 2013 through November, beating 2012’s 182,750 monthly tally.
The improvement in the economy and job market helps explain why the Federal Reserve decided to begin reducing stimulus. The central bank on Dec. 18 said it will trim monthly bond purchases to $75 billion from $85 billion starting this month.
Fed officials also raised their assessment of the outlook for the job market, predicting the unemployment rate will fall as low as 6.3 percent by the end of this year, compared with a September projection of 6.4 percent to 6.8 percent.
Not all businesses are seeing brighter prospects for hiring. Hewlett-Packard Co. of Palo Alto, California, plans to eliminate 5,000 positions in addition to the 29,000 already scheduled through fiscal 2014, the company reported in an annual filing earlier this week.
“Continued market and business pressures” prompted the decision for additional firings, according to the report.