Applications for U.S. unemployment benefits fell to a six-week low, a sign the labor market is improving after a setback last month.
First-time jobless claims decreased a larger-than-forecast 16,000 in the week ended April 20 to 339,000, the lowest since March 9, Labor Department data showed in Washington. Also today, Bloomberg’s Consumer Comfort Index held close to the highest level in five years.
Fewer dismissals show companies have enough confidence in demand and are in a position to add to headcount should sales strengthen after a pause in March. Americans last week grew more confident that their financial situations were improving, indicating rising home values and higher stock prices will help sustain spending and keep the economy expanding.
“We have a labor market recovery that’s ongoing,” said Guy Berger, an economist at RBS Securities Inc. in Stamford, Connecticut, who projected 340,000 filings and is the third-best claims forecaster in the past two years, according to data compiled by Bloomberg. “The labor market has its ups and downs, but the direction shows things are getting better. Companies are willing to increase their headcounts but at a very slow pace.”
Stocks rose after the figures and as companies from Cliffs Natural Resources Inc. to United Parcel Service Inc. reported earnings that topped estimates. The Standard & Poor’s 500 Index advanced 0.6 percent to 1,588.55 at 12:03 p.m. in New York.
The Bloomberg index of consumer comfort eased to minus 29.9 in the week ended April 21 from minus 29.2 the prior period, which was the highest since January 2008, today’s report showed. The latest week’s drop was within the margin of error of 3 percentage points. Households were the most optimistic about their finances in 10 months.
“Americans are feeling more secure about their own financial situation,” said Joseph Brusuelas, a senior economist at Bloomberg LP in New York. “Household wealth is recovering. The decline in gasoline prices is providing some relief to households across the income spectrum.”
Today’s U.S. data followed signs from overseas that the world economy is stabilizing. The German government lifted its growth forecast for Europe’s biggest economy this year, citing what it sees as employers’ willingness to step up hiring.