WASHINGTON — Fewer Americans than forecast filed first-time claims for unemployment insurance payments last week, pointing to an improving labor market.
Applications for jobless benefits decreased by 16,000 to 339,000 in the week ended April 20, the lowest since March 9, according to Labor Department data released today in Washington. Economists projected 350,000 claims, according to the median estimate in a Bloomberg survey. A Labor Department spokesman said the claims data typically bounce around this time of year.
The figures indicate companies have enough confidence to maintain current staffing levels and are in a position to add to headcount should sales strengthen. At the same time, recent data showing the economy began to cool at the end of the first quarter give businesses reason to pause, prolonging the time it takes joblessness to retreat to pre-recession levels.
“There’s been an improvement in the layoff situation,” Guy Berger, an economist at RBS Securities Inc. in Stamford, Conn., said before the report. “The problem is that it doesn’t seem like the hiring part of the equation has gone anywhere. The labor market is pretty much the same way it’s been the last two years, which is improving fast enough to gradually reduce the unemployment rate but not nearly as fast as everyone would like.”
Estimates for first-time claims ranged from 340,000 to 370,000 in the Bloomberg survey of 49 economists. The Labor Department revised the previous week’s figure up to 355,000, from an initially reported 352,000.
While a Labor Department spokesman said there was nothing unusual that affected today’s figures, he said big swings in claims are common this month because of layoffs related to school vacations and holidays such as Easter that don’t always occur during the same week each year. He also said the period of swings in unadjusted data should be coming to an end.
The four-week moving average of claims, a less-volatile measure, fell to 357,500 from 362,000.
The number of people continuing to collect jobless benefits fell by 93,000 to 3 million in the week ended April 13, the lowest since May 2008. 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 rose by about 7,600 to 1.79 million in the week ended April 6.
Twenty-seven states and territories reported a decrease in claims, while 26 reported an increase.
Initial jobless claims reflect weekly firings and tend to fall as job growth — measured by the monthly non-farm payrolls report — accelerates.
Contributing to the pool of the recently unemployed, Jones Group Inc., the owner of the Jones New York, Nine West and Anne Klein fashion brands, said Wednesday it will close 170 stores and trim 8 percent of its workforce after its first-quarter profit trailed analysts’ estimates. About 850 jobs are being cut, according to a Jones Group spokeswoman.
Job creation slowed last month in the U.S. Employers added a net 88,000, workers to payrolls in March, the fewest in nine months, according to Labor Department figures released April 5. Unemployment fell to 7.6 percent, the lowest in four years.
With the data showing the job market weakened in March, Federal Reserve Bank of New York President William C. Dudley said central bank officials have scope for maintaining their record monetary stimulus.
“While I don’t want to read too much into a single month’s data, this underscores the need to wait and see how the economy develops before declaring victory prematurely,” Dudley said on April 16. The slowdown, “along with the large amount of fiscal restraint hitting the economy now, makes me more cautious. We have seen only a moderate improvement in labor market conditions over the past six months or so.”
His concern was heightened by the threat of sequestration, the federal budget cuts that began taking effect on March 1. The reductions will trim 5 percent from domestic agencies and 8 percent for the Defense Department this fiscal year.
Next week, the Labor Department will release April’s report on the U.S. employment situation. Economists in a Bloomberg survey forecast the labor market regained some ground, with payrolls expanding by 155,000 after an 88,000 a month earlier. In the six months ended in March, employment averaged 188,000.