BLBG: Jobless Claims in U.S. Little Changed in Payroll Survey Week
Applications for U.S. unemployment benefits held below 300,000 for the seventh straight week, pointing to a rebound in payrolls after hiring eased last month.
Jobless claims increased by 1,000 to 295,000 in the week ended April 18, a Labor Department report showed Thursday in Washington. The median forecast of 55 economists surveyed by Bloomberg called for 287,000. The figures correspond to the week the government surveys employers to calculate the monthly payroll data, indicating hiring probably firmed in April.
Muted firings are helping boost prospects of a healthy labor market even as employers slowed hiring in March amid weaker foreign demand, chillier temperatures and fallout from the West Coast port workers’ dispute. Projections for more robust employment growth ahead may keep Federal Reserve officials on course to raise the benchmark interest rate this year for the first time since 2006.
Claims are “reasonably low by historical standards, and consistent with a very healthy labor market,” Terry Sheehan, an economic analyst at Stone & McCarthy Research Associates in Princeton, New Jersey, said before the report. “Overall the labor market seems strong enough to be able to keep absorbing a little more slack.”
Estimates in the Bloomberg survey for jobless claims ranged from 280,000 to 305,000. The prior week’s reading was unrevised at 294,000.
Puerto Rico
While there was nothing unusual in the data, Puerto Rico initially sent an estimate for claims because of a local holiday, a Labor Department spokesman said as the report was released to the press. Though the estimate was used in calculating the national figures, the territory later submitted actual readings and the difference would have had no impact on the national numbers, the spokesman said.
The four-week average of claims, a less-volatile measure than the weekly figure, climbed to 284,500 from 282,750 in the prior week. The comparable reading for the March payroll survey week was 305,250, signaling employment could have picked up.
The number of people continuing to receive jobless benefits rose by 50,000 to 2.33 million in the week ended April 11. The unemployment rate among people eligible for benefits held at 1.7 percent, where it’s been since mid-March. These data are reported with a one-week lag.
Claims below the 300,000 level are consistent with an improving employment picture.
“That’s typically a point at which you can say you have a fairly robust labor market,” Sheehan said.
Oil Patch
Not all areas of the economy have been immune to firings. Oilfield service provider Baker Hughes Inc. announced Tuesday that it had reduced headcount by 10,500, or 17 percent of its workforce, in the first quarter. The Houston-based company previously had reported a cut of 7,000 positions as the drop in energy prices weighed on oil-related business.
A consistently low level of firings typically portends strength on the hiring side of the market. The March payrolls report, however, joined a spate of disappointing data that contributed to declines in the Bloomberg Economic Surprise Index, which reached its lowest level in six years on April 17. Manufacturing, retail sales and housing construction also have dropped below economists’ projections in early 2015.
Employers added 126,000 workers in March for the lowest reading since December 2013. The gain was weaker than the most pessimistic forecast in the Bloomberg survey of 98 economists and ended a 12-month streak of increases of 200,000 or more.
Growth Forecast
Beyond severe weather and the fallout from the West Coast port workers’ dispute, the economy probably will show signs of healing. Gross domestic product will pick up to a 3.1 percent annualized pace in the second quarter after 1.4 percent in the first three months of the year, according to medians in a Bloomberg survey conducted April 3-8.
Consumers are showing they’re more upbeat about the economic outlook, with the University of Michigan sentiment gauge rising to its second-highest level in more than eight years. Households saw brighter prospects for the economy, their current financial situations and the buying climate, signaling a pickup in consumer spending that weakened at the start of the year.
Projections for a faster growth rate in the second half of the year boost chances that Fed policy makers will make further preparations to tighten monetary policy. The officials meet Apr. 28-29 in Washington to weigh when to raise the benchmark interest rate for the first time since 2006.
