The fewest workers applied for U.S. unemployment benefits over the past month since before the last recession, indicating the labor market is making progress.
The number of claims in the four weeks ended Aug. 3 declined to 335,500 on average, the least since November 2007, a Labor Department report showed today in Washington. Compared with a week earlier, claims rose by 5,000 to 333,000, in line with the median forecast of 50 economists surveyed by Bloomberg.
The level of firings is settling into a lower range following swings in July caused by annual auto plant shutdowns, showing employers want to hold on to workers to meet sales. That may be a precursor to a pickup in hiring, which will sustain household spending, the biggest part of the economy, and underpin growth in the second half of 2013.
“We’ll continue to see improvement,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, the third-best claims forecaster over the past two years, according to data compiled by Bloomberg. “It’s more important to put the emphasis on the trend in claims, which remains favorable.”
Stocks rose, after the Standard & Poor’s 500 Index capped its first three-day slide since June 12, after the figures and as China’s trade data topped forecasts. The S&P 500 increased 0.1% to 1,692.94 at 10:13 a.m. in New York.
No states were estimated, and there was nothing unusual in the state data last week, a Labor Department spokesman said as the figures were released to the press.
Auto plants often shut down to retool for the new model year, causing claims data to become more volatile in July.
Growth in the automobile industry may help employment. Automakers, enjoying the best U.S. sales since 2007, this week disclosed plans to spend $434 million to boost capacity. Ford Motor Co. said it’s looking to squeeze more vehicles out of every North American factory. Chrysler Group LLC yesterday said it will add capacity and almost 300 jobs at a Michigan engine plant.
Economists’ estimates in the Bloomberg survey ranged from claims of 315,000 to 370,000, leading to a median forecast of 335,000. The Labor Department revised the previous week’s figure from an initially reported 326,000.
The number of people continuing to receive jobless benefits rose by 67,000 to 3.02 million in the week ended July 27. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.