The number of applications for unemployment benefits unexpectedly dropped last week to the lowest level in three years, showing the U.S. labor market is healing.
Jobless claims dropped by 19,000 to 366,000 in the week ended Dec. 10, the fewest since May 2008, Labor Department figures showed today in Washington. The median forecast of 47 economists surveyed by Bloomberg News projected 390,000.
Slowing dismissals pave the way for an increase in employment that may help spur consumer spending, which accounts for about 70 percent of the economy, during the holiday shopping season. Nonetheless, the threat of a recession in Europe brought on by its sovereign debt crisis, and political wrangling over the U.S. budget, is restraining companies from expanding staff.
“We’re seeing improvement in labor-market conditions,” said Julia Coronado, chief economist for North America at BNP Paribas in New York. “It’s good to see claims moving this much below 400,000.”
A Labor Department spokesman said there was nothing unusual in the state level data last week.
A separate Labor Department report showed the producer price index increased 0.3 percent last month after declining 0.3 percent in October.
Manufacturing in the New York region expanded more than forecast in December to the highest level in seven months as measures of employment and new orders improved, another report showed. The Federal Reserve Bank of New York’s general economic index rose to 9.5 from 0.6 in November.
Stock-index futures added to earlier gains after the reports. The contract on the Standard & Poor’s 500 Index maturing in March rose 1.1 percent to 1,220.2 at 8:51 a.m. in New York. Treasury securities fell, sending the yield on the benchmark 10-year note up to 1.93 percent from 1.90 percent late yesterday.
Jobless claims were projected to increase from 381,000 initially reported for the prior week. Estimates ranged from 375,000 to 412,000. The Labor Department revised the previous week’s figure up to 385,000.
The four-week moving average, a less volatile measure than the weekly figures, dropped to 387,750 last week from 394,250.
The number of people continuing to receive jobless benefits rose by 4,000 in the week ended Dec. 3 to 3.6 million.
The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments jumped by about 332,200 to 3.64 million in the week ended Nov. 26.
Some employers are still looking for ways to reduce costs. BlackRock Inc., the world’s largest asset manager, plans to eliminate 59 jobs in San Francisco starting at the end of January. The New York-based company disclosed the cuts in a Dec. 7 state filing in California.
“In these challenging markets, BlackRock continues to exercise financial discipline,” Bobbie Collins, a company spokeswoman, said in an e-mailed statement on Dec. 12.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 2.9 percent, today’s report showed.
Forty-seven states and territories reported an increase in claims, while 6 reported a decrease. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
Slow progress in the job market remains a concern for the Federal Reserve, which this week left unchanged its statement that economic conditions are likely to warrant “exceptionally low” interest rates “at least through mid-2013.”
“While indicators point to some improvement in overall labor market conditions, the unemployment rate remains elevated,” the central bank said in a statement after its meeting on Dec 13.