Jobless Claims Little Changed, Signaling a Resilient Labor Market
Fewer than 300,000 Americans filed applications for unemployment benefits for a second week, signaling the labor market remains resilient even as the economy shows signs of slowing.
Jobless claims rose by 1,000 to 291,000 in the seven days ended March 14, from a revised 290,000 in the prior period, a Labor Department report showed March 19 in Washington. The median forecast of 51 economists surveyed by Bloomberg News called for 293,000. The figures correspond to the week the government surveys employers to calculate the monthly payroll data, indicating hiring probably continued to pick up.
“There’s clear progress in the labor market,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics in Valhalla, New York. He is the top forecaster of jobless applications in the past two years, according to data compiled by Bloomberg. “With claims remaining under the 300,000 level, payrolls will keep growing at a strong pace. Employment growth is strong enough for consumer spending to continue to grow solidly.”
After weeks of weather-related swings, claims settling at the current low level shows employers are holding on to workers, which bodes well for household spending, the biggest part of the economy. The results are in sync with the assessment of Federal Reserve policy makers, who said after their meeting March 19 that job-market conditions have improved.
Another report March 19 showed the U.S. current-account deficit widened in the fourth quarter on a reduction in corporate investment earnings from equity holdings of foreign affiliates.
The gap, the broadest measure of international trade because it includes income payments and government transfers, grew 14.7% to $113.5 billion, the biggest in more than two years, from a revised $98.9 billion shortfall in the prior period, Commerce Department figures showed. The median forecast of economists in a Bloomberg survey called for the deficit to widen to $104.1 billion.
The Labor Department’s claims figures showed no states estimated data last week and there was nothing unusual in the report, an agency spokesman said as the results were released to the press.
Economists’ estimates in the Bloomberg survey ranged from claims of 275,000 to 310,000. The Labor Department revised the previous week’s figure from an initially reported 289,000.
The four-week moving average, a less volatile measure than the weekly numbers, increased to 304,750 last week, from 302,500.
The government surveys employers for the pay period that includes the 12th of the month to calculate the monthly payroll data. Initial jobless claims reflect weekly firings and a sustained low level of applications has typically coincided with faster job gains. That’s why economists focus on claims for the survey week to help them project the month’s employment count.
The number of people continuing to receive jobless benefits declined by 11,000 to 2.42 million in the week ended March 7. The unemployment rate among people eligible for benefits held at 1.8%, where it’s been since early January. These data are reported with a one-week lag.
The progress on employment is consistent with the view of Fed policy makers, who on March 18 finished a two-day meeting to consider when to raise the benchmark interest rate for the first time since 2006.
“Labor market conditions have improved further, with strong job gains and a lower unemployment rate,” the central bank said in its statement. “A range of labor market indicators suggests that underutilization of labor resources continues to diminish.”
While dropping an assurance that they’ll be “patient” in raising rates, policy makers said it will be appropriate to tighten when they see “further improvement” in the labor market and are “reasonably confident” that inflation will move back to their 2% objective over the medium term.
Companies taking on more employees include Ipsen SA, the French maker of a rival product to Allergan Inc.’s Botox wrinkle smoother. Ipsen is adding workers in the U.S. to promote two key medicines for new uses. It has hired 100 people to build an oncology business in the U.S., and is filling a new office in the biotechnology hub of Cambridge, Massachusetts, company officials said this month.
Some are paring their workforce. Harley-Davidson Inc., the motorcycle maker, will dismiss 169 workers at a factory in Kansas City, Missouri. The company notified Missouri state officials that the reductions will take effect May 11 and continue through Sept. 30, according to a newspaper report.
In an environment of accelerating employment growth, many weekly firings may also reflect company- or industry-specific causes, such as cost-cutting or business restructuring, rather than underlying labor-market trends.
