Fewer Americans filed claims for unemployment benefits last week, showing employers are holding off on firings as growth prospects improve.
Jobless claims decreased by 5,000 to 343,000 in the week ended June 29 from a revised 348,000 in the prior period that was higher than initially reported, the Labor Department said today in Washington. The Bloomberg survey median called for 345,000 claims. No states were estimated and there was nothing unusual in the data, a Labor Department spokesman said shortly before the figures were released. The data were made public one day early due to the Independence Day holiday tomorrow.
Muted staff reductions are a sign that companies are keeping headcount steady even as economic growth struggles to gain strength. Greater demand in the second half of the year, buoyed by consumer purchases such as automobiles, may persuade employers to add to staff as the Federal Reserve weighs whether labor market progress is enough to reduce its monthly bond- buying.
“It’s been trending at a moderately low level,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida, who projected 345,000 claims. Among employers “there’s still some concern about hiring. Obviously they want to see an increase in demand for the goods and services they produce.”
Stock-index futures trimmed earlier losses following better- than-projected ADP jobs data. The contract on the Standard & Poor’s 500 Index maturing in September fell 0.3 percent to 1,602.7 at 8:35 a.m. in New York. It had been down as much as 0.8 percent on mounting political unrest in Egypt.
RBS is the top forecaster of jobless claims for the past two years, according to data compiled by Bloomberg.
Estimates in the Bloomberg survey of 50 economists ranged from 334,000 to 360,000 after a previously reported 346,000 in the prior week.
The four-week moving average, a less-volatile measure than the weekly figures, decreased to 345,500 last week from 346,250.
The number of people continuing to receive jobless benefits fell to 2.93 million in the week ended June 22 from 2.99 million in the prior period.
That continuing claims figure doesn’t include Americans receiving extended benefits under federal programs. The number of job seekers who have exhausted traditional benefits and are relying on emergency and federal extended aid dropped by about 39,300 to 1.67 million in the week ended June 15.
The unemployment rate among people eligible for benefits held at 2.3 percent in the week ended June 22, today’s report showed.
Thirty-one states and territories reported a decrease in claims and 22 reported an increase, according to data that are reported with a one-week lag.
Applications for jobless benefits, which track firings, typically fall before job growth can accelerate. Employers in the U.S. added 175,000 jobs in May while the jobless rate rose to 7.6 percent as more Americans, perhaps buoyed by improved prospects, looked for work.
Payrolls climbed by 165,000 in June, according to the Bloomberg survey median ahead of Labor Department data scheduled for release on July 5.
Automakers such as Ford Motor Co. are pointing to signs of strength in the economy as sales pick up.
“Economic indicators continue to improve,” Jenny Lin, Dearborn, Michigan-based Ford’s senior U.S. economist, said on a conference call yesterday. “The manufacturing sector moderation may be coming to an end. Housing sector recovery looks to continue. Consumer spending growth pace is slowly picking up.”
Cars and light trucks sold at a 15.9 million seasonally adjusted annualized rate in June, the strongest level since November 2007.