Fewer Americans than forecast filed jobless claims last week, hovering around levels that are typically associated with an improving job market.
Applications for unemployment benefits increased by 11,000 to 278,000 in the week ended Jan. 31, from a revised 267,000 in the prior period, a Labor Department report showed Thursday in Washington. The median forecast of 50 economists surveyed by Bloomberg called for a rise to 290,000.
While holidays make it difficult to adjust the date for seasonal swings this time of year, making the data more volatile, readings this low often correspond with gains in hiring. A report Friday is projected to show the U.S. payrolls grew 230,000 workers in January.
“The big picture is very positive,” said Stephen Stanley, chief economist at Amherst Pierpont Securities LLC in Stamford, Connecticut. “The labor market is certainly one of the bright lights in terms of economic performance in recent months.”
All eyes are on Friday, when a Labor Department report is projected to show the world’s largest economy added more than 200,000 jobs in January for a 12th consecutive month, and unemployment held at 5.6%, a more than six-year low.
Productivity Slumps
Another Labor Department report Thursday showed worker productivity workers dropped in the fourth quarter as employers boosted hours by the most in 16 years, making the cost of labor more expensive. The measure of employee output per hour decreased at a 1.8% annualized rate, after a revised 3.7% gain in the prior three months that was larger than previously estimated.
The U.S. trade deficit unexpectedly increased in December to a two-year high on a pickup in imports of motor vehicles and fewer shipments overseas, according to Commerce Department data also issued on Thursday. The gap widened 17.1% to $46.6 billion, the biggest shortfall since November 2012, from a revised $39.8 billion in November. The median forecast in a Bloomberg survey of 68 economists called for a $38 billion deficit.
Stock-index futures held earlier gains after the reports. The contract on the Standard & Poor’s 500 Index maturing in March climbed 0.8% to 2,046.5 at 8:55 a.m. in New York as oil prices rebounded.
Economist estimates for jobless claims ranged from 273,000 to 330,000 in the Bloomberg survey. The Labor Department revised the previous week’s figure from an initially reported 265,000.
No Estimates
No states estimated jobless claims last week and there was nothing unusual in the report, a Labor Department spokesman said as the figures were released. Additionally, no states indicated that the blizzard than blanketed the northeast last week prevented workers from filing applications.
The four-week moving average, a less volatile measure than the weekly figures, declined to 292,750 last week, the lowest in more than a month, from 299,250.
The number of people continuing to receive jobless benefits climbed by 6,000 to 2.4 million in the week ended Jan. 24. The unemployment rate among people eligible for benefits held at 1.8%. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and typically decline before job growth accelerates.
Other labor market indicators suggest steady momentum in the U.S., even as slumping energy prices hurt industries exposed to oil. ADP Research Institute said Wednesday that employment at companies climbed 213,000 in January after a 253,000 gain a month earlier that was larger than initially reported.
Mester’s View
The improvement in the labor market is enough to justify raising interest rates soon, according to Federal Reserve Bank of Cleveland President Loretta Mester.
“There are accumulating signs that the economy is building momentum,” said Mester, who doesn’t vote this year on the Federal Open Market Committee. “It will soon be appropriate to begin moving rates up from zero. Because policy must be forward looking, in my view liftoff should occur before our goals are fully met.”
Consumer demand and cheap gas are helping companies like Ford Motor Co. create more jobs. The automaker said Wednesday that it’s adding workers to help build a new aluminum-bodied pickup in Missouri and Michigan.
“Thanks to stronger-than-expected customer demand, we’re adding 1,550 new workers to support additional F-150 production,” Joe Hinrichs, the Dearborn, Michigan-based company’s president of the Americas, said in a statement. “We sell every truck we can build, and we plan to build more.”
Ford also said it planned to give raises to as many as 500 U.S. hourly employees because new hiring is pushing the company past its limit on lower-wage workers. Ford’s total hourly additions now total more than 15,000 since 2011, exceeding a pledge of 12,000 by 2015.