Fewer Americans than forecast filed applications for unemployment benefits last week, showing the labor market is making progress.
Jobless claims fell by 21,000 to 283,000 in the week ended Feb. 14, from 304,000 in the prior period, a Labor Department report showed Thursday in Washington. The median forecast of 50 economists surveyed by Bloomberg called for 290,000.
Employers are holding on to workers amid gains in household purchases, the biggest part of the economy. The improvement in the job market, coming off its best year for hiring since 1999, was noted by Federal Reserve policy makers at their January meeting as they debated when to begin raising interest rates.
“The labor market is improving,” said Raymond Stone, managing director at Stone & McCarthy Research Associates in Princeton, New Jersey, who projected claims would fall to 285,000. “It should be a positive for both consumer confidence and consumer spending.”
Stock-index future held earlier losses after the report. The contract on the Standard & Poor’s 500 Index maturing in March declined 0.1 percent to 2,092.6 at 8:51 a.m. in New York as oil prices tumbled for a second day and Germany said it rejected a proposal from Greece to seek an extension of its loan facilities from euro-area creditors.
Economists’ estimates in the Bloomberg survey ranged from claims of 270,000 to 320,000. The previous week’s figure was unrevised.
The Labor Department estimated claims for Tennessee because harsh winter weather prompted the state’s government offices to close for one day last week, a spokesman said as the figures were released to the press. Otherwise, there was nothing unusual in the report, he said.
The four-week moving average, a less volatile measure than the weekly figures, dropped to 283,250 last week, a three-month low, from 289,750.
The claims figures correspond to the week the government surveys employers to calculate the monthly payroll data. The four-week average is down from the 307,000 in the comparable January survey period.
The number of people continuing to receive jobless benefits climbed by 58,000 to 2.43 million in the week ended Feb. 7. The unemployment rate among people eligible for benefits held at 1.8 percent. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and a sustained low level of applications has typically coincided with faster job gains.
Claims at current levels are usually associated with gains in payrolls of around 250,000 a month, Stone said.
Advances in the labor market and cheaper fuel costs are helping to sustain household purchases, which account for about 70 percent of the economy. Payrolls averaged 336,000 over the last three months, the most since a comparable period ended in November 1997.
The strides in hiring are consistent with Fed policy makers’ assessment of the job market when they met in January to consider the timing of the first interest rate rise since 2006.
“Labor market conditions improved further, with strong job gains and a lower unemployment rate,” according to minutes of the Jan. 27-28 gathering released on Wednesday. Meeting “participants judged that the underutilization of labor resources was continuing to diminish.”
Demand for automobiles is boosting consumption and also helping to spur employment. Carmakers including Ford Motor Co. and General Motors Co. posted January U.S. sales that exceeded analysts’ estimates. Ford said this month it is adding 1,550 workers to help build the new aluminum-bodied F-150 pickup in Missouri and Michigan.
Businesses trimming staff include Zillow Inc., which announced 350 job cuts this month as it completed the acquisition of rival real-estate website Trulia Inc. It said it eliminated about 280 positions, mainly in San Francisco and Bellevue, Washington, and an additional 70 positions will be cut by the end of the second quarter, leaving the combined company with 2,000 employees.