BLBG: Jobless Claims in U.S. Likely Rose From Almost Three-Year Low
First-time claims for jobless benefits probably rose last week from an almost three-year low, a pause in the improvement in the U.S. labor market, economists said before a report today.
Initial applications for unemployment insurance climbed by 8,000 to 376,000 in the period ended March 5, according to the median forecast in a Bloomberg News survey. The gain would be the second in the past eight weeks. It would follow the previous week’s level of 368,000 claims, which were the fewest since May 2008. Separate figures may show a wider trade deficit in January on costlier imported oil.
The rebound in the world’s largest economy has limited firings, paving the way for employers such as Boeing Co. (BA) and Home Depot Inc. (HD) to add jobs and spur household spending. While American companies ship more goods abroad, stronger domestic demand and surging energy prices point to a bigger import bill, curbing the contribution to growth from trade.
“Demand has improved and we’re now in a stage where companies are starting to execute on hiring,” Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit. “The improvement in the labor market is by far the biggest plus for the economy. That’s what we really need to get self-sustaining growth.”
The Labor Department figures are due at 8:30 a.m. Estimates of 49 economists in the Bloomberg survey ranged from 355,000 to 410,000. The report may also show the total number of people getting unemployment insurance decreased.
Also at 8:30 a.m., the Commerce Department will issue trade data. Economists project a $41.5 billion shortfall for January after a $40.6 billion gap a month earlier. Estimates for the deficit ranged from $46 billion to $39 billion.
On the Mend
Recent reports add to evidence the labor market is on the mend. The jobless rate fell in February to 8.9 percent, the lowest since April 2009 and the third straight monthly decline, Labor Department figures showed last week. More seasonable weather helped boost payrolls by 192,000, the most since May.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
“We believe that we are in a continued positive economic recovery that will lead to positive labor growth over the course of the next couple of years,” Carl Camden, chief executive officer at Troy, Michigan-based temporary staffing provider Kelly Services Inc., said Feb. 24 at a conference in Boston. “We see strength in U.S. conditions.”
Temporary Hiring
Companies taking on staff include Atlanta-based Home Depot. The world’s largest home-improvement retailer in February said it is hiring more than 60,000 temporary workers in the U.S., and adding permanent employees for the second year in a row.
Boeing began “change incorporation” work on the 787 Dreamliner in San Antonio, Texas, where 450 employees will be hired on a temporary basis to join 1,700 experienced workers at the site to complete the work, the Chicago-based planemaker said on March 7.
Federal Reserve policy makers will likely keep interest rates near zero and maintain plans to buy $600 billion in Treasury securities by June to boost growth as they await additional signs of sustained job creation. Fed Chairman Ben S. Bernanke said employment data are encouraging.
“We do see some grounds for optimism about the job market over the next few quarters, including notable declines in the unemployment rate in December and January, a drop in new claims for unemployment insurance, and an improvement in firms’ hiring plans,” Bernanke said March 1 during testimony before lawmakers.
Limited Improvement
Still, the labor market “has improved only slowly,” and it may take “several years” for the unemployment rate to reach a “more normal level,” he said.
While stocks have gained this year amid signs employment is picking up along with the economy, they’ve been restrained by surging oil prices. The Standard & Poor’s 500 Index is down 0.5 percent so far this month.
The tax compromise reached by President Barack Obama and congressional Republicans in December has resulted in bigger paychecks that are helping support demand even as fuel costs rise. Costlier oil, which this week reached a 29-month high in New York, also will lead to higher imports. At the same time, exports of American-made goods, aided by a weaker dollar and expansion in developing economies like China, may help limit growth in the trade deficit.
