Fewer Americans than projected filed applications for unemployment benefits last week, a sign that the job market is sustaining recent gains.
Jobless claims decreased by 23,000 to 340,000 in the week ended May 18, Labor Department figures showed today in Washington. The median forecast of 50 economists surveyed by Bloomberg called for a drop to 345,000. No states were estimated and there was nothing unusual in the data, a Labor Department spokesman said.
Falling dismissals could lay the groundwork for a hiring pickup should the economy be able to overcome the federal budget cuts that are projected to curb the expansion. Federal Reserve Chairman Ben S. Bernanke yesterday said the job market is still weak, one reason why policy makers will continue buying bonds in a bid to keep interest rates low and spur growth.
“We’re definitely moving in the right direction,” said Carl Riccadonna, a senior U.S. economist at Deutsche Bank Securities Inc. in New York, who correctly predicted the drop in applications. “If we can get back to 330,000 or lower, that’s going to be an early sign that the economy is accelerating into the second half of the year.”
Other reports today showed consumer confidence is hovered last week around a five-year high and sales of new houses climbed more than forecast in April.
The weekly Bloomberg Consumer Comfort Index increased to minus 29.4 for the period ended May 19 from minus 30.2 the prior week. A measure of personal finances was positive for a sixth consecutive week, the longest stretch in more than five years.
Sales of new homes increased 2.3% to a three-month high of 454,000 homes at an annualized pace from a 444,000 rate in March that was faster than first estimated, the Commerce Department said. The median estimate of 76 economists surveyed by Bloomberg called for a gain to 425,000. The data included revisions back to January 2011. The median selling price rose to a record on sales of more expensive properties.
Stock fell as other data showed Chinese manufacturing unexpectedly shrank and equity markets from Europe to Japan tumbled. The Standard & Poor’s 500 Index dropped 0.7% to 1,644.45 at 10:13 a.m. in New York.
Economists’ estimates in the Bloomberg survey ranged from 338,000 to 360,000. The Labor Department revised the previous week’s figure to 363,000 from an initially reported 360,000.