Jobless Claims Hover Around Lowest Level in Four Decades
Jobless claims last week hovered around four-decade lows, showing the labor market remains the strongest part of the U.S. economy.
Initial applications for unemployment benefits climbed by 9,000 to 257,000 in the week ended April 23, a report from the Labor Department showed April 28 in Washington. The prior week’s revised 248,000 claims were the fewest since 1973.
The low level of firings indicates companies are optimistic about prospects for demand after a soft first quarter. Continued progress in the labor market that’s accompanied by accelerating wage growth will be needed to help prop up consumer spending, which accounts for 70% of the economy.
“We’re seeing things in the labor market hold up well,” Sarah House, an economist at Wells Fargo Securities in Charlotte, North Carolina, said before the report. “Businesses are feeling pretty comfortable with where the economy is going, so they don’t feel like they have to make those cuts” in headcount.
The median forecast of 50 economists surveyed by Bloomberg News called for claims to rise to 259,000. Estimates ranged from 240,000 to 281,000. The previous week’s figure was revised from an initially reported 247,000.
Another report showed the economy expanded in the first quarter at the slowest pace in two years as American consumers reined in spending and companies tightened their belts in response to weak global financial conditions and a plunge in oil prices. Gross domestic product rose at a 0.5% annualized rate after a 1.5% advance in the fourth quarter, according to the Commerce Department.
No states estimated data last week and there was nothing unusual in the data, according to the Labor Department.
The four-week moving average of claims, a less volatile measure than the weekly figures, decreased to 256,000, the lowest since December 1973, from 260,750.
The number of people continuing to receive jobless benefits fell by 5,000 to 2.13 million in the week ended April 16, the fewest since November 2000. The unemployment rate among people eligible for benefits held at 1.6%. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings, and a sustained low level of applications has typically coincided with faster job gains. Layoffs can also reflect company- or industry-specific causes, such as cost-cutting or business restructuring.
Nordstrom Inc. said last week it is eliminating as many as 400 jobs as it attempts to rein in expenses amid slowing mall traffic. The cuts, which will come mostly from the retailer’s corporate center and regional support teams, will save about $60 million in the company’s current fiscal year and will be complete by the company’s second quarter, which runs through July.
Federal Reserve policy makers noted the resilience of the labor market in a statement at the conclusion of a two-day meeting in Washington. Central bankers are weighing such data as they consider when future increases in their benchmark interest rate will be appropriate.
“Labor market conditions have improved further even as growth in economic activity appears to have slowed,” the Federal Open Market Committee said. “Growth in household spending has moderated, although households’ real income has risen at a solid rate and consumer sentiment remains high.”
