Fewer Americans than forecast filed first-time claims for unemployment insurance last week, an indication demand is strong enough to maintain current staff levels.
Applications for jobless benefits fell 9,000 to 363,000 in the week ended Oct. 27, the fewest in three weeks, the Labor Department reported today in Washington. Economists forecast 370,000 claims, according to the median estimate in a Bloomberg survey. Data for New Jersey and the District of Columbia were estimated because those offices were closed due to Hurricane Sandy, a spokesman said as the figures were released.
Fewer firings may mean companies are poised to boost hiring should the economy avert damage from the package of tax increases and spending cuts that will take effect next year if lawmakers fail to act. A Labor Department report tomorrow may show employers took on 125,000 workers in October, not enough to keep the jobless rate from rising to 7.9 percent from 7.8 percent, according to the Bloomberg survey median.
“Claims have been on a mildly improving trajectory,” said Gennadiy Goldberg, a U.S. strategist at TD Securities Inc. in New York who forecast the number of applications would drop to 365,000. “We’re definitely getting fewer firings, but hirings are picking up very gradually, and that’s why you’re only seeing gradual improvement in the labor market.”
Stock-index futures were little changed after the report. The contract on the Standard & Poor’s 500 Index maturing in December rose less than 1 percent to 1,407.50 at 8:40 a.m. in New York. The yield on the benchmark 10-year Treasury note rose to 1.72 percent from 1.69 percent late yesterday.
In a separate report, the ADP Research Institute said today companies expanded payrolls in October by the most in eight months, an indication the U.S. labor market was on the upswing at the start of the fourth quarter. The 158,000 increase followed a revised 114,000 gain in September, according to Roseland, New Jersey-based ADP.
Estimates for first-time jobless claims ranged from 355,000 to 380,000 in the Bloomberg survey of 49 economists. The Labor Department revised the prior week’s figures up from an initially reported 370,000.