The number of Americans filing applications for unemployment benefits unexpectedly declined last week, showing further progress in the labor market.
Jobless claims decreased by 5,000 to 305,000 in the week ended Sept. 21, a Labor Department report showed today in Washington. The median forecast of 49 economists surveyed by Bloomberg called for an increase to 325,000. The four-week average of initial filings fell to the lowest since June 2007.
Fewer dismissals may be a sign employers are optimistic about the demand outlook in the U.S. Further gains in employment and improved income growth will be necessary to spur bigger advances in consumer spending, which accounts for about 70% of the economy.
“The decline in claims is encouraging and suggests ongoing labor-market improvement,” said Gennadiy Goldberg, a strategist at TD Securities USA LLC in New York. “Employers are little bit more positive about the economic outlook.”
A Labor Department official said California and Nevada have caught up with a recent backlog of new applications stemming from a computer system changeover that skewed jobless claims data during the month.
California’s claims in the period ended Sept. 14 surged 22,611 as the state began a full week of processing applications. Filings in Nevada that same week rose 2,504.
Stocks rose after the figures, with the Standard & Poor’s 500 Index advancing 0.5% to 1,701.82 at 10:28 a.m. in New York. The yield on the 10-year Treasury note rose two basis points, or 0.02 percentage point, to 2.65%.
Other reports today showed consumer confidence improved last week, the economy expanded at a faster pace in the second quarter and fewer Americans signed contracts to buy previously owned homes in August.
Gross domestic product rose at a 2.5% annualized rate, unrevised from the previous estimate, after expanding 1.1% in the first quarter, Commerce Department figures showed. The median forecast of economists surveyed by Bloomberg was a 2.6% pace.
The Bloomberg Consumer Comfort Index rose in the week ended Sept. 22 to minus 28.1, the highest since the period ended Aug. 11, from minus 29.4. A gauge of personal finances advanced to a seven-week high as the fewest respondents since late April viewed their budgets as “poor.”
The index of pending home sales fell 1.6%, after a revised 1.4% decrease in July that was bigger than initially reported, figures from the National Association of Realtors showed.