Applications for unemployment benefits in the U.S. plunged more than forecast last week unwinding a surge caused by the Easter holiday and spring break at schools.
Jobless claims decreased by 42,000 to 346,000 in the week ended April 6, from a revised 388,000, Labor Department figures showed today in Washington. The median forecast of 49 economists surveyed by Bloomberg called for a drop to 360,000. A Labor Department official said no states were estimated and there was nothing unusual in the data.
Holidays such as Easter that fall on different weeks from year to year make it difficult to smooth out swings in the data, leading to increased volatility, the Labor Department said as the numbers were released. Waning firings, a sign employers are retaining workers to meet sales, help lay the ground for a pickup in hiring after payroll gains slowed in March.
“It’s heartening that these numbers have come down,” said Nariman Behravesh, chief economist at IHS Inc. in Lexington, Massachusetts, who forecast a decrease to 345,000, the closest among economists surveyed. “The weakness may have been overstated. This is an early piece of evidence that we’ll see a bounce back in the April employment numbers.”
Stock-index futures were little changed after the report. The contract on the Standard & Poor’s 500 Index maturing in June was at 1,582.7 at 8:47 a.m. in New York, the same as yesterday’s close.
Another Labor Department report today showed the cost of goods imported into the U.S. decreased 0.5% in March, led by declining fuel costs.
Economists’ claims estimates in the Bloomberg survey ranged from 335,000 to 380,000. The Labor Department revised the previous week’s figure up to 388,000, the highest since November in the aftermath of superstorm Sandy, from an initially reported 385,000.
Last week’s plunge may ease concern that sequestration, the automatic federal government spending cuts that began taking effect on March 1, had contributed to the jump in claims.
The four-week moving average, a less volatile measure than the weekly figures, rose to 358,000 last week from 355,000.
The number of people continuing to receive jobless benefits fell by 12,000 to 3.08 million in the week ended March 30.
The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments increased by about 37,800 to 1.84 million in the week ended March 23.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 2.4% in the week ended March 30, today’s report showed.
Twenty-one states and territories reported an increase in claims, while 32 reported a decrease. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
Declining dismissals, combined with a sustained pickup in hiring, are needed help spur consumer spending, which accounts for about 70% of the economy.
Payrolls grew in March by 88,000, the smallest gain in nine months, after a revised 268,000 February increase, the Labor Department reported on April 5. The unemployment rate fell to 7.6%, the lowest in four years, from 7.7%.
Federal Reserve Chairman Ben S. Bernanke and his colleagues reiterated March 20 they will press on with monetary easing until the labor market outlook improves “substantially.”
Minutes of the March meeting, released yesterday, showed members of the policy making committee “thought that if the outlook for labor market conditions improved as anticipated, it would probably be appropriate to slow purchases later in the year and to stop them by year-end.”
The economy expanded at a 3% annualized rate in the first three months of 2013 and will slow to a 1.5% pace in the second quarter, according to the median forecast of economists surveyed by Bloomberg from April 5 to April 9.
Cooling growth will in part reflect the $85 billion in across-the-board government budget cuts that started last month. The reductions in planned spending, which began because Congress couldn’t compromise on a debt-reduction strategy, trim 5% from domestic agencies and 8% for the Defense Department this fiscal year.
Some employers are still paring staff. Even after the banking industry posted its best results since 2006, the six largest U.S. banks announced plans in the first three months of this year to eliminate about 21,000 positions, or 1.8% of their combined workforce, according to data compiled by Bloomberg. That’s the most since 2011’s third quarter. JPMorgan Chase & Co. topped the list with 17,000 reductions scheduled by the end of 2014.