Jobless Claims Fall as Average at Eight-Year Low
The number of Americans filing applications for unemployment benefits unexpectedly fell last week, pushing the average over the past month to the lowest level in eight years and signaling that employers are hanging on to workers as the economy improves.
Jobless claims declined by 1,000 to 287,000 in the week ended Oct. 4, a Labor Department report showed in Washington.
The median forecast of 50 economists surveyed by Bloomberg News called for 295,000. The four-week average, considered a less volatile measure, decreased to 287,750, the least since February 2006.
Firings are hovering around the lowest in almost a decade as employers hang onto workers to meet rising demand. That lays the ground for stronger gains in hiring and wages that will give the world’s largest economy a boost even as global growth cools.
“We’ve had a good start to employment growth in the first nine months of this year, and there’s absolutely no indication that this trend is breaking heading into October,” said Guy Berger, U.S. economist at RBS Securities Inc. in Stamford, Connecticut, who projected claims would drop. “The stage is set for another pretty good employment month.”
Claims estimates in the Bloomberg economist survey ranged from 280,000 to 305,000. The Labor Department revised the previous week’s figure from an initially reported 287,000.
The four-week moving average for jobless claims dropped last week from 295,000 in the prior period.
The number of people continuing to receive jobless benefits fell by 21,000 to 2.38 million in the week ended Sept. 27, the fewest since May 2006. The unemployment rate among people eligible for benefits that week held at 1%.
Initial jobless claims reflect weekly firings and typically wane before job growth can accelerate.
Companies hired 248,000 workers in September, Labor Department figures showed last week. The unemployment rate fell to 5.9% last month, the lowest level since 2008.
Stronger prospects for economic growth and consumer demand could make companies feel more comfortable hiring.
The U.S. economy is predicted to grow 2.2% this year, compared with a 1.7% projection in July, the International Monetary Fund said this week. Next year, the U.S. is seen expanding 3.1 %, compared with a 3% pace forecast in July.
