Fewer Americans filed applications for unemployment benefits last week as employers retained staff to meet domestic demand for goods and services ahead of the holiday season.
Jobless claims decreased by 17,000 to 297,000 in the week ended Nov. 29 from 314,000 in the prior period, the Labor Department said today in Washington. The median forecast of 46 economists surveyed by Bloomberg called for a decline to 295,000.
The drop in the number of applications back under 300,000 will help ease concern that the pace of job-market improvement was cooling heading into the holiday-shopping season. A Labor Department report tomorrow is projected to show payrolls climbed in November by more than 200,000 workers for a 10th consecutive month and the unemployment rate held at a six-year low.
“Overall the picture of labor is one of ongoing payroll gains and gradually firming wage growth,” said Gregory Daco, lead U.S. economist at Oxford Economics USA Inc. in New York, who forecast initial claims would drop to 296,000. “If jobless claims are below that 300,000 threshold, that’s typically in line with strong payroll gains.”
Today’s report showed Minnesota attributed some of the increase in claims two weeks ago to bad weather. Ten other states said firings climbed in the construction industry, which could also mean inclement conditions slowed building projects.
Temperatures were at least 15 degrees Fahrenheit below normal in five states—Wisconsin, Iowa, Illinois, Indiana and Ohio—during the week ended Nov. 22, according to the National Oceanic and Atmospheric Administration. Almost all of the contiguous 48 states had below-normal temperatures as the polar vortex swept south.
Stock-index futures were little changed as investors sifted through comments by European Central Bank President Mario Draghi to access the outlook for monetary policy. The contract on the Standard & Poor’s 500 Index (CME:SPZ14) maturing this month fell less than 0.1% to 2,070.7 at 8:57 a.m. in New York.
Claims estimates in the Bloomberg survey ranged from 275,000 to 310,000. The prior weeks’ claims were revised up from an initial reading of 313,000.
A report yesterday showed companies added 208,000 workers to payrolls in November, following a revised 233,000 gain the month before, according to figures from the Roseland, New Jersey-based ADP Research Institute.
Employment probably increased by 230,000 in November after a 214,000 gain the previous month, according to the Bloomberg survey median ahead of the Labor Department’s Dec. 5 report. The unemployment rate is projected to hold at 5.8%, the lowest since July 2008.
The four-week average of claims, a less-volatile measure than the weekly figure, rose to 299,000 from 294,250 the week before.
There was nothing unusual in the claims data and no states were estimated, a Labor Department spokesman said as the report was released to the press.
The number of people continuing to receive jobless benefits climbed by 39,000 to 2.36 million in the week ended Nov. 22.
In that same period, the unemployment rate among people eligible for benefits held at 1.8%, where it’s been since early September, the report showed.
Initial jobless claims, which reflect weekly firings, typically decrease before the economy sees gains in the number of jobs available. Sustained readings below 300,000 signal that the pace of hiring may be holding up.
Companies under pressure to meet holiday demand have buoyed the labor market, bringing on staff to deal with the rush. United Parcel Service plans to hire 95,000 seasonal workers to deliver a forecasted 585 million packages in December, up 11% over last year. The shipping company’s single day delivery peak was 31 million packages last holiday season—a record it expects to break six days over this time around.
Gains in the labor market are expected to last beyond the holiday season. Hiring prospects for technical/professional and office/clerical employees will show modest improvements in the first quarter, while fewer employers are planning layoffs, according to a Bloomberg BNA survey of 160 employers.
U.S. Bancorp, the nation’s largest regional lender, plans to add as many as 4,500 jobs by the end of 2015, Chief Executive Officer Richard Davis said in a Bloomberg Television interview on November 21.
Many of the new jobs created by the Minneapolis-based bank will be in compliance and audit, Davis said, and some will be filled by veterans and people out of work for more than six months.
The Federal Reserve has kept a watchful eye on the jobless rate as it measures when to wean the economy off near-zero interest rates. Fed Chair Janet Yellen focused on labor market improvements when she announced an end to quantitative easing in October.