Shobhana Chandra Washington
FEWER Americans than forecast applied for unemployment benefits last week, a sign that the US job market is making progress as the economy gathers momentum.
Jobless claims fell by 14 000 to 298 000 in the week ended August 16, a Labor Department report showed yesterday. The median forecast of 46 economists called for 303 000. Continuing claims fell to the lowest level in more than seven years.
Employers are holding the line on dismissals as second-half economic growth is projected to pick up, setting the stage for more hiring to meet demand. Waning claims also reinforce Federal Reserve policymakers’ view that the labour market is strengthening, one reason they are trimming monthly asset purchases.
“Claims are sending very encouraging signals about the improvement in the economy and the job market,” Ryan Sweet, a senior economist at Moody’s Analytics, said before the report.
“Businesses are not laying off aggressively. It’s consistent with solid gains in payrolls.”
No states were estimated and there were no special factors, the Labor Department report showed.
The Labor Department revised the previous week’s figure to 312 000 from an initially reported 311 000.
The monthly average of claims, a less volatile measure than the weekly figures, rose to 300 750 last week from 296 000.
The number of people on jobless benefit rolls declined by 49 000 to 2.5 million in the week ended August 9. It is at the lowest level since June 2007, before the last recession began.
Last week included the 12th of the month, which coincides with the period the department uses in its survey of employers to calculate monthly payroll growth.
The unemployment rate among people eligible for benefits held at 1.9 percent in the period ending August 9.
Initial jobless claims reflect weekly firings and typically wane before job growth can accelerate. Payrolls grew by more than 200 000 last month for the sixth consecutive month, the first time since 1997, according to the department’s data released earlier this month.
The jobless rate climbed last month to 6.2 percent from an almost six-year low of 6.1 percent in June as more Americans entered the labour force to look for work.
Fed officials raised the possibility they might begin removing aggressive stimulus sooner than anticipated, as they neared agreement on an exit strategy. – Bloomberg