First-time claims for unemployment insurance payments declined more than forecast last week to the lowest level since early October, adding to evidence the labor market is improving.
Applications for jobless benefits fell by 29,000 to 343,000 in the week ended Dec. 8, the fewest since reaching a four-year low in the period ended Oct. 6, Labor Department figures showed today. Economists forecast 369,000 claims, according to the Bloomberg survey median. The number of people on unemployment benefit rolls declined for a fourth straight week.
Jobless claims have dropped 108,000 in the latest four weeks after a superstorm Sandy-related surge, indicating companies are comfortable with current staffing levels. To help encourage more hiring, the Federal Reserve said yesterday that it intends to keep policy accommodative until unemployment falls to 6.5 percent from the current 7.7 percent.
“The job market is holding up reasonably well,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania, the best forecaster of claims in the past two years, according to Bloomberg data. At the same time, “expectations are tempered somewhat by the uncertainty surrounding the fiscal cliff” of tax increases and budget cuts in 2013, he said.
Other reports today showed a decline wholesale prices and a rebound in retail sales in November. The 0.3 percent gain in purchases reflected stronger sales of automobiles, electronics and clothes, according to Commerce Department data.
Stock-index futures were little changed after the figures. The contract on the Standard & Poor’s 500 Index expiring this month fell 0.1 percent to 1,426.3 at 8:54 a.m. in New York.
Estimates for first-time claims ranged from 348,000 to 380,000 in the Bloomberg survey of 52 economists. The prior week’s applications were initially reported as 370,000.
A Labor Department official said as today’s figures were released that there was “nothing unusual” in the data. The effects of Sandy, which swept ashore on Oct. 29 and sent claims soaring in New Jersey and New York, have dissipated.
The four-week moving average, a less-volatile measure of claims, decreased to 381,500 from 408,500.
The number of people continuing to collect jobless benefits fell by 23,000 to 3.2 million in the week ended Dec. 1. The continuing claims figure does not include the number of workers receiving extended benefits under federal programs.
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments increased by about 189,000 to 2.23 million in the week ended Nov. 27.
The unemployment rate among people eligible for benefits held at 2.5 percent in the week ended Dec. 1. Forty-eight states and territories reported an increase in unadjusted claims, while five reported a decrease.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
A Labor Department report last week showed U.S. payrolls climbed by 146,000 in November, above a median forecast that called for an 85,000 gain. The unemployment rate fell to 7.7 percent, the lowest level since December 2008.
Coupled with a stronger housing market, the jobs report shows the U.S. economy will be better set to weather federal budget cuts and tax increases that could occur next year if lawmakers fail to agree to reduce long-term budget deficits.
Even so, the economy has shown few signs it will accelerate to the pace of growth needed to encourage faster hiring. As a result, Fed officials yesterday said the central bank will buy $45 billion a month of Treasury securities starting in January, expanding its asset-purchase program, and for the first time linked the outlook for its main interest rate to unemployment and inflation.
“The conditions now prevailing in the job market represent an enormous waste of human and economic potential,” Fed Chairman Ben S. Bernanke said in a news conference following the announcement. The Fed plans to “maintain accommodation as long as needed to promote a stronger economic recovery in the context of price stability,” he said.
The Federal Open Market Committee said interest rates will stay low “at least as long” as the unemployment rate remains above 6.5 percent and if inflation “between one and two years ahead” is projected to be no more than 2.5 percent.
Contributing to the pool of unemployed Americans, WebMD Health Corp., the online provider of medical information, said Dec. 11 it will eliminate 250 jobs, or 14 percent of its workforce, in a cost-cutting measure, Credit Suisse Group AG, the second-biggest Swiss bank, said Dec. 10 it plans to cut 120 jobs in New York City to reduce expenses.