Jobless Claims Drop to Lowest Level in 15 Years
Applications for U.S. jobless benefits declined last week to the lowest level in 15 years, showing employers view a first-quarter slowdown in the economy probably is temporary.
First-time filings for unemployment insurance fell by 34,000 to 262,000 in the week ended April 25, the lowest since April 15, 2000, a Labor Department report showed April 30. The figure was smaller than the lowest projection in a Bloomberg survey of economists.
With job openings at a 14-year high and prospects for stronger growth after the first-quarter setback, companies are intent on maintaining headcounts. The level of firings is consistent the Federal Reserve’s view of sustained progress in the job market.
“Claims have been quite steady, remaining below this key level of 300,000,” Thomas Costerg, an economist at Standard Chartered Bank in New York, said before the report. “The U.S. labor market is in good shape and has been quite resilient.”
The median forecast of 50 economists surveyed by Bloomberg News called for 290,000, with estimates ranging from 275,000 to 300,000. Claims in the prior week were revised to 296,000 from an initially reported 295,000.
The Labor Department, an agency spokesman said as the report was released, estimated claims for Louisiana because of a storm-related power outage. The estimate was close to the actual figure reported later by the state, the spokesman said.
The four-week average of claims, a less-volatile measure than the weekly figure, declined to 283,750 from 285,000 in the prior week.
The number of people continuing to receive jobless benefits dropped by 74,000 to 2.25 million in the week ended April 18, the lowest level since December 2000. The unemployment rate among people eligible for benefits held at 1.7 %. These data are reported with a one-week lag.
Claims since the beginning of March have held below the 300,000 level that economists say is consistent with an improving labor market.
Consistently low levels of firings typically signal strength in hiring. Even after a setback in March employment, payrolls probably will average 226,000 this year after a 260,000 monthly average in 2014 that was the best in 15 years, according to a Bloomberg survey conducted April 3-8.
Employers added 126,000 workers last month, the fewest since December 2013. The result snapped a 12-month streak of increases of 200,000 or more.
The number of available positions at employers portends stronger hiring. Job openings climbed to 5.13 million in February, the most since January 2001, Labor Department data showed earlier this month. There are about 1.7 unemployed Americans per opening, matching the lowest level since November 2007.
Underlying strength in the labor market is keeping executives at Ann Arbor, Michigan-based Domino’s Pizza Inc. optimistic about their sales outlook.
“The employment market looks awfully healthy out there,” CEO Patrick Doyle said on an April 23 earnings call. “Certainly, we’d like to see that a little stronger than we saw it the last month or two, but the trend is clearly up. The recovery is continuing. And we’ve said often that that correlates to higher pizza category consumption.”
The broader economy took a hit in the first quarter as the stronger dollar combined with more transitory effects of bad winter weather and a labor dispute at West Coast ports to weigh on growth.
Gross domestic product, the volume of all goods and services produced, rose at a 0.2% annualized rate in the first three months of the year after advancing 2.2% the prior quarter, Commerce Department data showed April 29. The median forecast of 86 economists surveyed by Bloomberg called for a 1% gain.
Fed officials said April 29 after a policy meeting that the economy weakened partly for reasons that will be short-lived.
“Economic growth slowed during the winter months, in part reflecting transitory factors,” the Federal Open Market Committee said in a statement. “The pace of job gains moderated,” it said, and “underutilization of labor resources was little changed.”
