Jobless Claims Decline for First Time in Month
Jobless claims fell 15,000 to 281,000 in the week ended July 11 from a revised 296,000 in the prior period, a Labor Department report showed July 16. The median forecast of 46 economists surveyed by Bloomberg News called for 285,000.
Jobless claims can see-saw at this time of year as automakers shutter plants to retool operations for the new model year, making it more difficult to discern the underlying trend. Firings have held below 300,000 for 19 consecutive weeks, the longest streak since 2000 and a sign of a stronger labor market.
“Claims are consistent with ongoing labor market improvement,” said Sean Incremona, senior economist at 4Cast Inc. in New York, whose forecast for 280,000 filings tied for the closest in the survey. “Claims continue to tell us that not many people are losing their jobs.”
Estimates in the survey for jobless claims ranged from 260,000 to 296,000. The Labor Department revised the prior week’s reading from an initially reported 297,000.
The number of applications dropped to 262,000 in late April, the lowest since 2000.
No states were estimated last week, and nothing unusual was in the data, a Labor Department spokesman said as the report was released.
Auto-plant shutdowns probably will continue to affect the figures for at least another two weeks, Incremona said.
The four-week average of claims, a less-volatile measure than the weekly figure, increased to 282,500 from 279,250 in the prior week.
The number of people continuing to receive jobless benefits dropped by 112,000 to 2.22 million in the week ended July 4. The unemployment rate among people eligible for benefits declined to 1.6% from 1.7%. These data are reported with a one-week lag.
Beyond the annual retooling period, labor negotiations might impact the auto industry’s unemployment filings. Ford Motor Co. is scheduled to begin contract talks with the United Auto Workers union July 23 to replace a deal that expires in September.
The Dearborn, Michigan-based automaker intends to lower its labor costs. Ford’s average U.S. hourly labor expense, including benefits, is $57, about $9 more than at Toyota Motor Corp. and Fiat Chrysler Automobiles NV’s U.S. unit, according to the Center for Automotive Research in Ann Arbor, Michigan.
The other side of the employment equation has shown resilience in 2015 even as growth was uneven in the first half. Hiring gains have averaged 208,330 a month this year after a 259,670 average in 2014 that was the best since 1999.
Gross domestic product fell at a 0.2% annualized rate in the three months ended March, the slowest pace in a year, according to Commerce Department data. Economists project GDP accelerated to a 2.7% pace from April through June, according to a Bloomberg survey ahead of the July 30 release on second-quarter growth.
