The fewest Americans in nine weeks filed applications for unemployment benefits, a sign of further strength in the labor market that will continue to support the U.S. expansion.
Jobless claims dropped by 20,000 to 268,000 in the week ended March 28, the lowest since the period ended Jan. 24 and second-lowest in at least a year, a Labor Department report showed Thursday in Washington. The median forecast of economists surveyed by Bloomberg called for 286,000.
The figures indicate employers are upbeat about the prospects for sales after a recent slowdown and dismissing fewer workers. The outlook for employment bodes well for household spending, the biggest part of the economy, and is in sync with Federal Reserve policy makers’ view of the job market’s progress.
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“Claims are just really low and pretty stable,” Guy Berger, U.S. economist at RBS Securities Inc. in Stamford, Connecticut, said before the report. RBS is among the top forecasters of jobless applications in the past two years, according to data compiled by Bloomberg. “The labor market is in good shape.
Estimates of 46 economists in the Bloomberg survey ranged from claims of 270,000 to 310,000 after an initially reported 282,000 the previous week. Thursday’s figures included revised seasonal adjustment factors from the Labor Department dating back to 2010.
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No states estimated jobless claims last week and there was nothing unusual in the report, an agency spokesman said as the figures were released.
A separate report from the Commerce Department showed the U.S. trade deficit shrank in February to the lowest level in more than five years as a labor dispute at West Coast ports contributed to the weakest reading on imports since 2011. The gap narrowed 16.9 percent to $35.4 billion. Imports were the lowest since April 2011.
The four-week moving average for jobless claims, a less volatile measure than the weekly numbers, decreased to 285,500 last week, from 300,250, the Labor Department’s report showed.
The number of people continuing to receive jobless benefits dropped by 88,000 to 2.33 million in the week ended March 21. The unemployment rate among people eligible for benefits fell to 1.7 percent from 1.8 percent. These data are reported with a one-week lag.
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Claims over the past month have dropped below the 300,000 level that economists say is consistent with an improving job market.
At the same time, recent reports show the economy slowed at the start of 2015. Consumer spending barely rose in February as harsh winter weather kept households away from malls and automobile dealerships.
A report Wednesday showed manufacturing expanded in March at the slowest pace in almost two years, restrained by a stronger dollar, weaker foreign demand, a plunge in oil prices and lingering delays in shipments from West Coast ports.
Some of that is also reflected in private payrolls data. Companies added 189,000 workers in March, the smallest gain since January 2014, according to the ADP Research Institute, which produces the report with Moody’s Analytics Inc.
Energy-related industries are hurting from the oil price slump. In Texas, the largest U.S. oil producer, job growth may slow to as little as 1 percent this year from 3.4 percent in 2014, putting the state on track to lag behind the rest of the nation for the first time in more than a decade, according to a March 18 report by the Federal Reserve Bank of Dallas. It said the jobs of as many as 140,000 Texans are at risk.
Initial jobless claims reflect weekly firings and a sustained low level of applications has typically coincided with faster job gains. In an environment of accelerating employment growth, many weekly layoffs may also reflect company- or industry-specific causes, such as cost-cutting or business restructuring, rather than underlying labor market trends.
The March jobs report, due from the Labor Department on Friday, may show payrolls rose by 245,000 workers in March after climbing by 295,000 the prior month. The unemployment rate probably held at 5.5 percent, the lowest since 2008.
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