Jobless Claims Jump by Most Since December 2013
The number of Americans filing for unemployment benefits jumped by the most since December 2013 last week from a week earlier, a sign of uneven progress in the labor market.
Jobless claims increased by 31,000 to 313,000 in the week ended Feb. 21 from a revised 282,000 in the prior period, a Labor Department report showed Feb. 26 in Washington. The median forecast of 49 economists surveyed by Bloomberg News saw claims rising to 290,000.
Looking past the weekly data, which can often be volatile, job-market fundamentals have improved as payroll growth accelerates and Americans stream into the labor force looking for work. Continued improvement will be needed to generate faster wage growth and support consumer spending, which accounts for 70% of the economy.
The data probably say “more about the difficulties that you have seasonally adjusting weekly series when you have floating holidays” such as Presidents’ Day on Feb. 16 this year, said Brian Jones, a senior U.S. economist at Societe Generale in New York, whose forecast for 315,000 claims was the closest in the Bloomberg survey. “The total number of people collecting benefits continues to move lower.”
Estimates in the Bloomberg survey ranged from 280,000 to 315,000. The prior week’s claims were revised from an initial reading of 283,000.
The number of people continuing to receive jobless benefits dropped by 21,000 to 2.401 million in the week ended Feb. 14. In that same period, the unemployment rate among people eligible for benefits held at 1.8 %, the report showed.
The four-week average of claims, a less-volatile measure than the weekly figure, gained to 294,500 from a revised 283,000 the week before.
No states estimated jobless claims last week and there was nothing unusual in the report, a Labor Department spokesman said after the figures were released. The jump in claims may be the result of seasonal adjustment anomalies, a trend that’s been seen over the last month or so, he said.
Initial jobless claims reflect weekly firings and typically decrease before job growth can accelerate. Many layoffs now reflect company-specific causes, such as one-time cost-cutting or business restructuring.
Computer maker Hewlett-Packard Co. said 2,800 people were cut from the company in its first quarter ended January. As part of a 2012 restructuring plan, the company has reduced its workforce by about 44,000 people, with a total of 55,000 expected to exit by the completion of its fiscal 2015, which ends in October.
The Palo Alto, California-based company is breaking up to become more responsive to corporate customers and said it will incur about $2 billion in costs over two years related to the split. The split will form two publicly traded companies, one selling corporate equipment and services and the other focused on PCs and printers.
Federal Reserve officials are monitoring improvement in the labor market as they consider the timing of their first interest rate increase since 2006.
“Important progress” has been made toward the Fed’s goal of maximum employment, Chair Janet Yellen said in congressional testimony this week. Still, “too many Americans remain unemployed, wage growth is still sluggish and inflation remains well below our longer-run objectives.”
