First-time claims for unemployment insurance payments declinedmore than forecast last week to the lowest level since earlyOctober, adding to evidence the labor market is improving.

Applications for jobless benefits fell by 29,000 to 343,000 inthe week ended Dec. 8, the fewest since reaching a four-year low inthe period ended Oct. 6, Labor Department figures showed today.Economists forecast 369,000 claims, according to the Bloombergsurvey median. The number of people on unemployment benefit rollsdeclined for a fourth straight week.

Jobless claims have dropped 108,000 in the latest four weeksafter a superstorm Sandy-related surge, indicating companies arecomfortable with current staffing levels. To help encourage morehiring, the Federal Reserve said yesterday that it intends to keeppolicy accommodative until unemployment falls to 6.5 percent fromthe 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 aretempered 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 arebound in retail sales in November. The 0.3 percent gain inpurchases reflected stronger sales of automobiles, electronics andclothes, according to Commerce Department data.

Stock-index futures were little changed after the figures. Thecontract on the Standard & Poor's 500 Index expiring this monthfell 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 380,000in the Bloomberg survey of 52 economists. The prior week'sapplications were initially reported as 370,000.

A Labor Department official said as today's figures werereleased that there was “nothing unusual” in the data. The effectsof Sandy, which swept ashore on Oct. 29 and sent claims soaring inNew 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 fellby 23,000 to 3.2 million in the week ended Dec. 1. The continuingclaims figure does not include the number of workers receivingextended benefits under federal programs.

Emergency Benefits

Those who've used up their traditional benefits and are nowcollecting emergency and extended payments increased by about189,000 to 2.23 million in the week ended Nov. 27.

The unemployment rate among people eligible for benefits held at2.5 percent in the week ended Dec. 1. Forty-eight states andterritories reported an increase in unadjusted claims, while fivereported a decrease.

Initial jobless claims reflect weekly firings and tend to fallas job growth — measured by the monthly non-farm payrolls report —accelerates.

A Labor Department report last week showed U.S. payrolls climbedby 146,000 in November, above a median forecast that called for an85,000 gain. The unemployment rate fell to 7.7 percent, the lowestlevel since December 2008.

Coupled with a stronger housing market, the jobs report showsthe U.S. economy will be better set to weather federal budget cutsand tax increases that could occur next year if lawmakers fail toagree to reduce long-term budget deficits.

Even so, the economy has shown few signs it will accelerate tothe pace of growth needed to encourage faster hiring. As a result,Fed officials yesterday said the central bank will buy $45 billiona month of Treasury securities starting in January, expanding itsasset-purchase program, and for the first time linked the outlookfor its main interest rate to unemployment and inflation.

“The conditions now prevailing in the job market represent anenormous waste of human and economic potential,” Fed Chairman BenS. Bernanke said in a news conference following the announcement.The Fed plans to “maintain accommodation as long as needed topromote a stronger economic recovery in the context of pricestability,” he said.

The Federal Open Market Committee said interest rates will staylow “at least as long” as the unemployment rate remains above 6.5percent and if inflation “between one and two years ahead” isprojected to be no more than 2.5 percent.

Contributing to the pool of unemployed Americans, WebMD HealthCorp., the online provider of medical information, said Dec. 11 itwill eliminate 250 jobs, or 14 percent of its workforce, in acost-cutting measure, Credit Suisse Group AG, the second-biggestSwiss bank, said Dec. 10 it plans to cut 120 jobs in New York Cityto reduce expenses.

Bloomberg

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