Applications for unemployment benefits in the U.S. declined to the lowest level in almost two months, showing further healing in the labor market.
Jobless claims in the week ended Nov. 16 dropped by 21,000 to 323,000, the fewest since the week ended Sept. 28, from a revised 344,000 the previous week, the Labor Department said today in Washington. The median forecast of 47 economists surveyed by Bloomberg called for a drop to 335,000. Last week included the Veterans’ Day holiday, which makes adjusting the data for seasonal swings more difficult, a Labor Department spokesman said.
Rising sales going into the holiday-shopping period will probably prompt employers to keep current workers on staff to meet demand. Fewer firings may also lead to bigger gains in hiring that will help boost consumer spending, which accounts for almost 70 percent of the economy.
“We’re discounting this a little bit, only because some of this is just seasonal noise,” said Omair Sharif, a U.S. economist for RBS Securities in Stamford, Connecticut, who projected a drop in claims to 325,000. “The pace of layoffs hasn’t changed that significantly in the last few months.”
Economists’ estimates in the Bloomberg survey ranged from 323,000 to 360,000. The prior week’s claims were revised up from an initial reading of 339,000.
No states estimated the number of claims for last week, the Labor Department said.
PRODUCER PRICES
Another report today showed wholesale prices dropped in October for a second month, showing inflation remains tame.
The 0.2 percent decrease in the producer price index followed a 0.1 percent fall the prior month, the separate Labor Department report showed. The decline matched the median estimate in a Bloomberg survey of 75 economists. The so-called core measure, which strips out volatile food and fuel, climbed 0.2 percent after a 0.1 percent gain in September.
Stock-index futures held earlier gains after the reports. The contract on the Standard & Poor’s 500 Index maturing in December rose 0.2 percent to 1,783.5 at 8:50 a.m. in New York.
The four-week average of claims, a less-volatile measure, decreased to 338,500 last week from 345,250 the prior week.
The number of people continuing to receive jobless benefits increased by 66,000 to 2.88 million in the week ended Nov. 9.
EXTENDED BENEFITS
Continuing claims don’t include Americans who have exhausted their traditional state aid and are receiving emergency and extended benefits under federal programs. Those job seekers decreased by about 32,200 to 1.3 million in the week ended Nov. 2.
The unemployment rate among people eligible for benefits held at 2.2 percent in the week of Nov. 9, where it’s been since mid-September.
Forty-seven states and territories reported an increase in claims, while six reported a decrease. These data are reported with a one-week lag.
Federal Reserve policy makers meet next Dec. 17-18 to weigh whether economic growth and progress in the labor market merit a reduction in the $85 billion of monthly asset purchases. Fed Vice Chairman Janet Yellen, nominated to succeed Ben S. Bernanke when his term expires Jan. 31, told lawmakers last week that “supporting the recovery today is the surest path to returning to a more normal approach to monetary policy” and that the Fed “has more work to do” in boosting the expansion.
PAYROLL GAINS
Employers added 204,000 workers to payrolls in October even as gridlock over the budget in Washington forced the partial closing of federal agencies, topping the most optimistic forecast in a survey of economists, a Nov. 8 Labor Department report showed.
Retail sales showed a stronger-than-forecast pickup in October, a positive sign for companies as shoppers enter the holiday season. The 0.4 percent increase was the most in three months and higher than the 0.1 percent median in a Bloomberg survey of 86 economists.
Consumer spending gains even amid the 16-day partial federal government shutdown are lifting the outlook for businesses such as La-Z-Boy Inc. of Monroe, Michigan.
“It isn’t anything to be alarmed about,” Chief Executive Officer Kurt Darrow said on an earnings call yesterday, referring to the shutdown’s effects. “The consumer recovered pretty nicely.”
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