First-Time Jobless Claims Decline
Fewer Americans than forecast filed applications for unemployment benefits last week, a sign persistent demand is fueling gains in the labor market.
First-time jobless claims dropped 10,000 to a three-week low of 278,000 in the week ended Nov. 1, the Labor Department reported in Washington. The median forecast of 50 economists surveyed by Bloomberg called for 285,000. The four-week moving average, a less-volatile measure of job cuts, reached the lowest level in more than 14 years.
Cutbacks in dismissals and increased hiring are sustaining household purchases, which account for 70% of the world’s largest economy. Wages that have been slow to pick up remain a headwind for bigger spending gains that would make it easier for the expansion to accelerate.
“The labor market continues to strengthen,” said Ward McCarthy, chief financial economist at Jefferies. “It’s going to continue to gain momentum, but so far the supply-and-demand dynamics in the labor market have not translated into gains in wages.”
Estimates in the Bloomberg survey for initial claims ranged from 275,000 to 300,000 after a previously reported 287,000 in the previous week.
Another report showed productivity rose more than projected in the third quarter, helping to contain labor costs even as employment picks up. The Labor Department’s measure of employee output per hour increased at 2% annualized rate, after a revised 2.9% pace in the prior three months. Economists forecast a 1.5%, according to the Bloomberg survey median.
Labor costs rose 0.3% in the third quarter after a 0.5% annualized decline, the agency said.
No states estimated jobless data and there was nothing unusual in the report, a Labor Department spokesman said as the figures were released.
The four-week average of claims declined to 279,000, the lowest since April 2000, from 281,250 in the prior period.
The number of people continuing to receive benefits fell by 39,000 to 2.35 million in the week ended Oct. 25, the fewest since December 2000. The unemployment rate among people eligible for benefits held at 1.8%.
Employers have added an average of more than 227,000 jobs a month so far this year, according to Labor Department data.
FedEx Corp. and United Parcel Service Inc. are boosting staffing as they prepare for the holiday-shopping season. Atlanta-based UPS is adding as many as 95,000 temporary workers, 10,000 more than last year, in anticipation that it will deliver 11 % more packages, even as U.S. export markets cool, according to Chief Executive Officer David Abney.
“Overall, the global economic outlook has been mixed,” Abney said on an Oct. 24 earnings call.
