First-time claims for jobless benefits fell last week to a one-month low, helping allay concern that the labor market may suffer an extended setback.
Jobless claims dropped by 1,000 to 367,000 in the period ended May 5, in line with the median forecast in a Bloomberg News survey and the lowest since the end of March, the Labor Department said today in Washington. The number of people on unemployment benefit rolls was the smallest since July 2008.
The data indicate the surge in claims in the first three weeks of April was probably tied to the timing of the Easter holiday rather than a deterioration in employment. Further declines in dismissals would point to ongoing improvement in the job market, helping sustain household purchases after payrolls cooled last month.
“Part of the reason we’ve seen consumer spending hold up is because we’ve stopped seeing a large amount of layoffs,” Drew Matus, senior U.S. economist at UBS Securities LLC in Stamford, Connecticut, said before the report. “The general trend in jobless claims is lower.”
The latest week’s figure compares with an average of 373,000 claims since the end of February.
The median forecast of 47 economists surveyed by Bloomberg called for 368,000 applications last week. Estimates ranged from 345,000 to 380,000. The Labor Department revised the previous week’s figure from 365,000.
Stock-index futures held gains after the figure, with the contract on the Standard & Poor’s 500 Index expiring next month rising 0.6 percent to 1,359 at 8:34 a.m. in New York.
Also today, Commerce Department figures showed the trade deficit widened more than forecast in March as American demand for crude oil, computers, automobiles and televisions propelled imports to a record.
The gap grew 14 percent to $51.8 billion. The median estimate of economists surveyed by Bloomberg called for an increase to $50 billion. A 5.2 percent jump in imports, the biggest in more than a year, swamped the 2.9 percent gain in exports, which also reached a record.
The four-week moving average, a less-volatile measure than the weekly figures, decreased to 379,000 last week from 384,250 the previous period.
The number of people continuing to receive jobless benefits dropped to 3.23 million in the week ended April 28 from 3.29 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 collecting emergency and extended payments declined by about 40,500 to 3.04 million.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, decreased to 2.5 percent in the week ended April 28, from 2.6 percent. Thirty-five states and territories reported a decrease in claims, while 18 reported an increase. State 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.
American employers added fewer workers than forecast in April and the jobless rate unexpectedly fell as people left the labor force, the Labor Department said on May 4. Payrolls climbed 115,000, the smallest gain in six months.
At the same time, in markets where the labor market has improved, business is picking up.
“Although national job growth numbers have been uneven and a bit disappointing over the past few months, we are seeing much improved employment trends in many of our markets,” Allan Merrill, president and chief executive officer of Beazer Homes USA Inc. in Atlanta, said in a May 2 earnings call.
“We are seeing many currently employed consumers who appeared to be gaining confidence and are voluntary changing jobs to improve their employment circumstances,” he said. “This isn’t necessarily picked up in the job growth statistics, but we believe it is a positive turn.”
Federal Reserve policy makers said last month that there was still an “elevated” rate of joblessness in the U.S.
“Labor market conditions have improved in recent months; the unemployment rate has declined but remains elevated,” the Federal Open Market Committee said in an April 25 statement. “The committee expects economic growth to remain moderate over coming quarters and then to pick up gradually. Consequently, the committee anticipates that the unemployment rate will decline gradually toward levels that it judges to be consistent with its dual mandate.”