The fewest number of Americans since before the last recession filed applications for unemployment benefits last week, pointing to more progress in the labor market.
Jobless claims decreased by 32,000 to 300,000 in the week ended April 5, the lowest since May 2007, a Labor Department report showed today in Washington. The figure was lower than the most optimistic forecast in a Bloomberg survey of 52 economists. The median estimate called for 320,000 claims.
Fewer dismissals will help pave the way for a pickup in hiring as demand recovers from harsh winter weather, providing a bigger boost to the economy. Federal Reserve policy makers are monitoring progress in the labor market as they continue to scale back their bond-buying program based on an improving economic outlook.
“We’re moving in the right direction,” said Thomas Simons, a money market economist at Jefferies LLC in New York, whose forecast for 310,000 claims was the lowest in the Bloomberg survey. “The underlying trend for claims is a gradual drift lower. Looking at the entire history of claims, you don’t get too far beyond this level, even in a very healthy economy.”
Economists’ estimates in the Bloomberg survey ranged from 310,000 to 330,000. The prior week’s claims were revised up to 332,000 from an initial reading of 326,000.
Stocks fell after the Standard & Poor’s 500 Index posted its biggest gain in five weeks as investors awaited earnings reports. The S&P 500 dropped 0.3 percent to 1,867.55 at 10:03 a.m. in New York.
In another report today, Labor Department figures showed import prices climbed for a fourth month in March, led by higher costs of food, fuels and industrial supplies. The gauge rose 0.6 percent from a month earlier. Compared with March 2013, costs declined 0.6 percent.
The four-week average of claims, a less-volatile measure than the weekly figure, fell to 316,250 -- the lowest since the end of September -- from 321,000 the week before.
At the same time, the Easter holiday can make adjusting the claims data for seasonal variations more difficult.
“The shifting date of the Easter holiday from year-to-year causes problems for the seasonal adjustments, so we need to see a few more weeks’ numbers before we can be sure where the trend now stands,” Ian Shepherdson, chief economist at Pantheon Macroeconomics Inc. in White Plains, New York, wrote in a research note. “Our core view is that claims are drifting gently downwards, consistent with our view that payroll gains are set to pick up.”
The number of people continuing to receive jobless benefits decreased by 62,000 to 2.78 million in the week ended March 29, the lowest since January 2008.
The unemployment rate among people eligible for benefits fell to 2.1 percent in the week ended March 29 from 2.2 percent the prior week, today’s report showed.
Twenty-seven states or U.S. territories reported higher claims at the end of March, while 26 said applications declined. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and typically decline before job growth picks up speed. Even as the economy improves, some companies such as Sprint Corp. are still shrinking payrolls.
The third-largest U.S. wireless carrier said in an internal announcement on March 18 that 1,600 customer-service workers at U.S. locations were being laid off. The action affected workers at six call centers.
Even so, the U.S. should lead global growth this year thanks to a longer-period of record-low interest rates orchestrated by the Fed, stronger private demand and the end of a fiscal drag that slowed economic improvement in 2013, the International Monetary Fund said earlier this week.
Growth in the U.S. is projected to reach 2.7 percent this year, according to a Bloomberg survey of economists, supporting the Fed’s outlook that the economy has improved enough to continue unwinding its bond-buying program.
The central bank announced last month a $10 billion reduction in monthly bond buying to $55 billion and repeated that it will taper purchases “in further measured steps at future meetings.” The committee announced $10 billion reductions in purchases at the previous two meetings.