The number of Americans filing applications for unemployment benefits unexpectedly dropped last week to the lowest level in almost two months, adding to signs the labor market in strengthening.
First-time jobless claims fell by 10,000 to 332,000 in the week ended March 9, the fewest since mid January, according to data today from the Labor Department in Washington. The median forecast of 49 economists surveyed by Bloomberg called for an increase to 350,000. The four-week average declined to a five-year low.
Managers are maintaining staffing levels as consumers sustain spending even after a two percentage-point increase in the payroll tax at the start of the year reduced paychecks. Nonetheless, there remains a risk that the recent pickup in employment will be cut short as federal budget cutbacks prompt companies and government agencies to trim payrolls.
“The rate of job destruction is pretty low,” said Scott Brown, chief economist at Raymond James & Associates in St. Petersburg, Florida, who projected the number of claims would drop to 338,000. “The labor market is in continued-recovery mode, though there is still a lot of ground to make up.”
Economists’ estimates in the Bloomberg survey ranged from 330,000 to 365,000 claims. The Labor Department revised the number of applications for the prior week to 342,000 from an initially reported 340,000.
Another Labor Department report showed wholesale prices climbed in February by the most in five months, reflecting a jump in energy costs that are now dissipating.
The 0.7% increase in the producer price index followed a 0.2% rise the prior month. The median estimate in a Bloomberg survey of 72 economists called for a 0.7% gain. Excluding volatile food and energy, the so-called core measure advanced 0.2%.
Stock-index futures held earlier gains after the reports. The contract on the Standard & Poor’s 500 Index maturing in June climbed 0.3% to 1,554.6 at 8:47 a.m. in New York.
No states estimated the number of claims last week and there was nothing unusual in the weekly data, a Labor Department official said as the figures were released.
The less-volatile four-week moving average decreased to 346,750, the lowest level since March 2008.
The number of people continuing to receive jobless benefits fell by 89,000 to 3.02 million in the week ended March 2, the fewest since June 2008. The continuing claims figure doesn’t include Americans receiving extended unemployment benefits under federal programs.