Job seeker Walter Hemphill fills out paperwork at the Hiring Our Heroes veterans employment fair sponsored by the United States Chamber of Commerce, the Chicagoland Chamber of Commerce and the Illinois Chamber in Chicago. Photographer: Tim Boyle/Bloomberg
Fewer Americans filed first-time
claims for unemployment insurance last week, indicating the
labor market is recovering.
Applications for jobless benefits fell 10,000 in the week
ended April 2 to 382,000, the fewest since Feb. 26, Labor
Department figures showed today. Economists projected claims
would be little changed at 385,000, according to the median
estimate in a Bloomberg News survey. The number of people on
unemployment benefit rolls and those collecting extended
payments decreased.
Fewer firings along with further increases in headcount may
help ensure that gains in consumer spending, which accounts for
70 percent of the economy, are sustained. Unemployment that has
declined four straight months supports the view of Federal
Reserve policy makers that the job market is showing signs of
healing.
“The improvement in the labor market is for real,” said
Eric Green, chief market economist at TD Securities Inc. in New
York. “Growth is on a steady upswing. Sales expectations are
rising with more hiring plans.”
Estimates for first-time claims ranged from 373,000 to
400,000 in the Bloomberg survey of 44 economists. The Labor
Department initially reported the prior week’s applications at
388,000.
Stock-index futures maintained gains after the report. The
contract on the Standard & Poor’s 500 Index expiring in June
rose 0.2 percent to 1,331.9 at 8:42 a.m. in New York. The
benchmark 10-year Treasury note fell, pushing up the yield to
3.57 percent from 3.55 percent late yesterday.
Four-Week Average
The four-week moving average, a less volatile measure,
dropped to 389,500 from 395,250.
The number of people continuing to collect jobless benefits
declined by 9,000 in the week ended March 26 to 3.72 million.
The continuing claims figure does not include the number of
workers receiving extended benefits under federal programs.
Those who’ve used up their traditional benefits and are now
collecting emergency and extended payments decreased by about
91,400 to 4.27 million in the week ended March 19.
The unemployment rate among people eligible for benefits,
which tends to track the national jobless rate, held at 3
percent in the week ended March 26. Thirty-three states and
territories reported a decrease in claims, while 20 had an
increase.
Initial jobless claims reflect weekly firings and tend to
fall as job growth -- measured by the monthly non-farm payrolls
report -- accelerates.
Jobless Rate
The unemployment rate in the U.S. unexpectedly fell to a
two-year low of 8.8 percent in March as employers created more
jobs than forecast, the Labor Department said last week.
Payrolls rose by 216,000 after a 194,000 gain in February.
As employment picks up, consumers have the wherewithal to
increase spending, encouraging companies to hire more workers.
McDonald’s Corp. (MCD), the world’s largest restaurant chain by
revenue, is seeking about 50,000 workers in the U.S. during its
National Hiring Day event on April 19, the company said in a
news release this week.
General Motors Co. (GM) is among companies that says the economy
is improving, which may lead to more hiring.
“We continue to see good solid signs of progress despite
some of the challenges that remain” for the economy, Don
Johnson, vice president of U.S. sales for GM, said during an
April 1 teleconference. “A recovering job market is going to be
the most important factor for the U.S. economy at this stage,
and we do anticipate that this is going to continue to
improve.”
‘Moderate Pace’
The economic recovery “continued to proceed at a moderate
pace, with a further gradual improvement in labor market
conditions,” minutes of the Fed’s March 15 meeting released
this week showed.
While U.S. central bankers unanimously decided during that
meeting to maintain their $600 billion stimulus, some of the 10
voting members of the committee thought evidence of a stronger
recovery, higher inflation and rising inflation expectations
“could make it appropriate to reduce the pace or overall size
of the purchase program,” according to the minutes.
“A few participants indicated that economic conditions
might warrant a move toward less-accommodative monetary policy
this year; a few others noted that exceptional policy
accommodation could be appropriate beyond 2011.”
To contact the reporter on this story:
Alex Kowalski in Washington at
akowalski13@bloomberg.net
To contact the editor responsible for this story:
Christopher Wellisz at
cwellisz@bloomberg.net