Fewer Americans than forecast filed claims for unemployment insurance last week as state offices rushed to tally the data in a holiday-shortened period.
Applications for jobless benefits decreased 12,000 to 350,000 in the week ended Dec. 22, Labor Department figures showed Thursday. Economists forecast 360,000, according to the median estimate in a Bloomberg survey.
Claims in 19 states and territories were estimated because government office closures on Dec. 24 prevented a complete count, a Labor Department spokesman said.
The level of claims indicates companies are seeing enough demand to maintain headcounts, a necessary development before hiring picks up. To help spur demand, thereby stimulating faster job growth, the Federal Reserve said this month it plans to keep monetary policy accommodative.
“One half of the equation has improved, and that’s the layoff picture,” Omair Sharif, a U.S. economist at RBS Securities Inc. in Stamford, Connecticut, said before the report. “There’s still a lot of reluctance from firms to go out right now and invest in hiring.”
Stock-index futures held earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in March rose 0.2 percent to 1,416.2 at 8:33 a.m. in New York as lawmakers return to Washington to resume budget talks.
Estimates for first-time claims ranged from 350,000 to 375,000 in the Bloomberg survey of 41 economists. The prior week’s applications were revised to 362,000 from an initially reported 361,000.
The federal holiday on Dec. 24 prompted many state offices to close, making it more difficult to completely tally the data in time, the Labor Department spokesman said. Fourteen states and territories provided their own estimates, which are usually “fairly accurate,” the spokesman said. The Labor department estimated data for the five states that didn’t provide any figures, he said.
The four-week moving average of claims, a less-volatile measure, dropped to 356,750, the lowest since March 2008.
The number of people continuing to collect jobless benefits fell by 32,000 to 3.21 million in the week ended Dec. 15. 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 4,500 to 2.15 million in the week ended Dec. 8.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
So far this year employers have hired an average of about 151,000 workers each month, according to Labor Department data. That rate compares with average monthly payroll additions near 153,000 in 2011.
Labor market progress is more pronounced when considering the jobless rate, which fell 0.8 percentage point to 7.7 percent from the end of 2011 through November.
Fed policy makers, nonetheless, contend that bigger drops in unemployment are contingent on faster economic growth. They announced on Dec. 12 that for the first time they will link the bank’s main interest rate to unemployment and inflation and would expand an asset purchasing program in January to spur the economy.
Interest rates will stay low “at least as long” as the jobless 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, the Federal Open Market Committee said in a statement.
Avista Corp is among companies eliminating staff. The energy holding company based in Seattle said last week it will let go 56 employees in a bid to cut costs, representing about half of the workers that volunteered to take a severance package, according to the Spokesman-Review, a newspaper in Spokane, Washington.
© Copyright 2023 Bloomberg News. All rights reserved.