Jobless Claims in U.S. Fell in 2014 to Lowest in 14 YearsShobhana Chandra
Fewer Americans filed applications for unemployment benefits in 2014 than at any time in 14 years as the economic expansion strengthened.
An average 308,500 workers a week filed jobless claims this year, the least since 299,600 in 2000, according to figures from the Labor Department in Washington. Applications climbed by 17,000 to 298,000 in the week ended Dec. 27, more than projected, displaying the typical year-end holiday swings.
Other reports today showed consumer confidence had its best year since 2007, manufacturing in the Chicago region kept chugging ahead and home sales signaled a rebound in coming months, indicating the world’s largest economy is poised to pick up in 2015. The improvement will probably be driven by gains in hiring that are leading to bigger paychecks.
“Labor-market conditions are continuing to grind a little bit tighter,” said Thomas Simons, an economist at Jefferies LLC in New York, whose claims estimate for last week was the closest among economists surveyed. “It’s moving us closer to the point when we get acceleration in wage growth.”
Stocks fell, erasing December’s gains for the Standard & Poor’s 500 Index and paring an annual advance after equity gauges reached all-time highs. The S&P 500 dropped 1 percent to 2,058.9 at the close in New York.
More hiring and cheaper fill-ups at the gas pump combined to lift American consumers’ spirits this year. The Bloomberg Consumer Comfort Index averaged 36.7 in 2014, the strongest in seven years, according to other figures today. While the gauge slipped to 42.7 in the week ended Dec. 28 from 43.1, it was the second-highest level since October 2007.
The Institute for Supply Management-Chicago Inc. also said its business barometer decreased to 58.3 this month from 60.8 in November. Readings greater than 50 signal growth.
Its average for the year, at 60.8, was the highest since 2011.
Also today, contracts to purchase previously owned homes rose in November, a report from the National Association of Realtors showed. The pending home sales index advanced 0.8 percent after a revised 1.2 percent decrease in October.
The increase in jobless claims last week was the first since late November.
The median forecast of 22 economists surveyed by Bloomberg called for 290,000. Estimates ranged from 275,000 to 315,000. The Labor Department revised the previous week’s figure to 281,000 from an initially reported 280,000.
The number of applications can fluctuate during this time of year as the holidays make it tough to adjust the data for seasonal variations. Last week reflected claims during the Christmas holiday.
The four-week moving average, a less volatile measure than the weekly figures, increased to 290,750 last week from 290,500.
The number of people continuing to receive jobless benefits dropped by 53,000 to 2.35 million in the week ended Dec. 20. The unemployment rate among people eligible for benefits held at 1.8 percent. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and typically decline before job growth accelerates.
Monthly payroll increases have averaged almost 241,000 so far in 2014, up from the prior year’s 194,000. The addition of 2.7 million workers to payrolls has put the economy on track for the biggest annual gain in hiring since 1999, and the jobless rate is at a six-year low.
Better employment prospects are buoying Americans’ moods. The Conference Board’s index of consumer confidence rose to 92.6 in December from a revised 91 in November that was stronger than initially estimated, the New York-based private research group said yesterday. A measure of current conditions advanced to the highest in almost seven years.
The cheapest fuel costs since 2009 also are lifting household spending, which accounts for about 70 percent of the economy, and have helped retailers to draw more holiday shoppers. Sales in November and December will gain 4.1 percent, the most since 2011, the National Retail Federation predicts.
Steelcase Inc., a Grand Rapids, Michigan-based maker of office furniture, is among companies encouraged by the latest figures for economic growth and the labor market.
“The jobs creation data, in particular, has had a good correlation with our business,” Chief Executive Officer James Keane said on an earnings conference call with analysts on Dec. 23. “That was a good sign.”