The number of Americans filing claims for jobless benefits unexpectedly dropped last week to the lowest level in more than five years, indicating companies are retaining staff even as the economy cools.
Applications for unemployment insurance payments fell 18,000 to 324,000 in the week ended April 27, the fewest since January 2008, a month after the last recession started, Labor Department figures showed today in Washington. Economists forecast 345,000 claims, according to the median estimate in a Bloomberg survey. A Labor Department official said there was nothing unusual in the data.
Fewer firings show companies are confident their staff levels can adequately meet current demand. Even so, without a pickup in economic growth, the same companies may be reluctant to hire more workers in coming months.
“Employers are not necessarily shedding workers, but they are not necessarily enthusiastic about adding to payrolls either,” said Tom Simons, an economist at Jefferies LLC in New York, who projected claims would drop to 335,000. “It’s because of the low level of growth in the economy, and some caution about the future of fiscal policy.”
Estimates for first-time claims ranged from 335,000 to 365,000 in the Bloomberg survey of 48 economists. The Labor Department revised the previous week’s figure up to 342,000, from an initially reported 339,000.
The U.S. trade deficit narrowed more than forecast in March as imports of consumer goods and business equipment declined, Commerce Department data also showed today.
The gap shrank 11 percent to $38.8 billion, its second-lowest level in three years, from a revised $43.6 billion in February. The median forecast in a Bloomberg survey of 67 economists called for a $42.3 billion deficit. Imports dropped by the most since February 2009 as the U.S. shortfall with China fell to a three-year low.
Stocks rose, with the Standard & Poor’s 500 Index rebounding from the biggest drop in two weeks, after the European Central Bank cut its key interest rate to a record low. The S&P 500 advanced 0.6 percent to 1,591.93 at 10:15 a.m. in New York.
A Labor Department official today said no states were estimated last week. In the previous week, an official said swings in data were common at this point of the year, during which there are typically layoffs related to school vacations and holidays such as Easter that don’t always occur during the same week. He also said the period of volatility should be coming to an end.
The productivity of U.S. workers rose less than projected in the first quarter as the economy expanded, helping cool labor expenses, another Labor Department report today showed.
The measure of employee output per hour increased at a 0.7 percent annual rate, after a 1.7 percent drop in the prior three months. The median forecast in a Bloomberg survey of economists called for a 1 percent advance. Expenses per worker increased at a 0.5 percent rate after jumping at a 4.4 percent pace in the previous three months.
The four-week moving average of claims, a less-volatile measure, fell to 342,250 from 358,250.
The number of people continuing to collect jobless benefits rose by 12,000 to 3.02 million in the week ended April 20. 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 fell by about 12,600 to 1.78 million in the week ended April 13.
The unemployment rate among people eligible for benefits held at 2.3 percent in the week ended April 20. Thirty-nine states and territories reported a decrease in claims, while 14 reported an increase.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
Electronic Arts Inc., the second-largest video-game publisher, said April 25 that it’s cutting jobs as part of a restructuring to focus on mobile games and new technology. The company didn’t say how many jobs would be eliminated. Ecolab, a water, cleaning supplies and energy technologies company, said April 30 it planned to cut 500 jobs amid $55 million in restructuring costs.
Tomorrow, the Labor Department will release its report on the U.S. employment situation during April. Economists surveyed by Bloomberg forecast the jobs market made some headway last month, with payrolls growing by 145,000 after a gain of 88,000 a month earlier. The unemployment rate probably held at a four-year low of 7.6 percent.