Jobless Claims Hold Below 300,000 for 12th Week
Applications for U.S. jobless benefits remained below 300,000 for the 12th straight week, signaling the labor market remains firm even as the economy has been slow to rebound from a first-quarter slump.
Jobless claims increased by 7,000 to 282,000 in the week ended May 23, a Labor Department report showed May 28. The median forecast of 51 economists surveyed by Bloomberg News called for 270,000. Readings this low typically coincide with healthy levels of hiring.
Persistently low firings signal managers are planning for at least steady business demand. As joblessness approaches the Federal Reserve’s definition of full employment, employers might be pressured to boost paychecks in order to retain and attract workers.
“The firing side of the equation has pretty much run its course in terms of recovering to normal,” said Jacob Oubina, a senior U.S. economist at RBC Capital Markets in New York, whose projection for 280,000 claims was among the closest in the Bloomberg survey. “The unemployment rate should continue to decline, and wage pressures on the back of that should firm up.”
Estimates in the Bloomberg survey for jobless claims ranged from 265,000 to 285,000. The Labor Department revised the prior week’s reading to 275,000 from an initially reported 274,000.
No states were estimated last week, and nothing unusual was in the data, a Labor Department spokesman said as the report was released.
The four-week average of claims, a less-volatile measure than the weekly figure, climbed to 271,500 from a 15-year low of 266,500 the prior week.
The number of people continuing to receive jobless benefits increased by 11,000 to 2.22 million in the week ended May 16.
The unemployment rate among people eligible for benefits rose to 1.7% from 1.6%. These data are reported with a one-week lag.
Job gains have been slow to rebound after a weaker start to the year, rising by 223,000 in April after 85,000 the prior month that was the lowest since June 2012.
Payroll increases have averaged 193,750 a month in 2015 after a 259,670 average last year that was the best since 1999.
A steadily improving labor market is among things construction equipment maker Deere & Co. sees contributing to a brighter economic outlook.
“The economy continues to move forward,” Susan Karlix, manager of investor communications at the Moline, Illinois-based company, said on a May 22 earnings call. “GDP growth is improving, unemployment is falling, construction hiring is on the increase and housing starts are expected to exceed 1 million units this year.”
The world’s largest economy is crawling out of a first-quarter slump, when it barely expanded amid a stronger dollar, severe weather and a labor dispute at West Coast ports.
Gross domestic product increased at a 0.2% pace in the first three months of the year, Commerce Department data show.
The government’s revised estimate probably will indicate growth contracted at a 0.8% rate, according to the median estimate in a Bloomberg survey ahead of the May 29 release.
Jobless claims have been a rare, reliably positive indicator as the economy struggles to gain traction in the second quarter.
Economic data are showing more signs of momentum after a string of disappointing figures pushed the Bloomberg Economic Surprise Index this month to its lowest level of the expansion earlier.
