Jobless Claims Fall as 4-Week Average Reaches 15-Year Low
Fewer Americans than forecast filed applications for unemployment benefits last week, pushing the average over the past month to the lowest level in 15 years and underscoring labor-market strength.
Jobless claims decreased by 1,000 to 264,000 in the seven days ended May 9, a Labor Department report showed May 14. The median forecast of 53 economists surveyed by Bloomberg News projected 273,000. The four-week average, a less-volatile measure, was the lowest since April 2000.
Fewer workers are being let go, a sign that demand for staffing remains robust and that a slowdown in economic growth was due to transitory factors, such as bad weather and port disputes on the West Coast. Persistently low firings and greater employment gains should help wages pick up, supporting consumer spending.
“Labor-market conditions are quite firm,” said Raymond Stone, managing director at Stone & McCarthy Research Associates in Princeton, New Jersey. “Typically, when you have low claims, you have strong payroll numbers.”
Jobless claims estimates in the Bloomberg survey of economists ranged from 260,000 to 285,000. The prior week’s claims were unrevised at 265,000.
The number of people continuing to receive jobless benefits held at 2.23 million in the week ended May 2.
In that same period, the unemployment rate among people eligible for benefits held at 1.7%, where it’s been since mid-March, the report showed.
Initial jobless claims reflect weekly firings and typically decrease before job growth can accelerate. Many layoffs now reflect company- or industry-specific causes, such as cost-cutting or business restructuring.
Capital One Financial Corp., the bank that generates more than half its revenue from credit cards, notified Texas authorities that it plans to cut 299 jobs in the Dallas area as it aims to consolidate call centers.
The cuts are effective July 4, the Texas Workforce Commission said May 11 in a statement. The majority are call-center positions for the firm’s retail bank, said Julie Rakes, a spokeswoman for McLean, Virginia-based Capital One.
Payrolls grew by 223,000 last month, and the unemployment rate fell to 5.4% from 5.5% in March, another Labor Department report showed last week. The increase in payrolls followed a revised 85,000 gain in March that was the smallest since June 2012.
Wage growth, which typically rises faster as the labor market tightens, remained limited, with average hourly earnings rising 0.1% in April after a revised 0.2% March gain that was weaker than initially reported.
Compared with a year earlier, hourly pay was up 2.2% last month, holding within the narrow range tracked over the past four years.
