JOBLESS CLAIMS DECLINED to 331,000 in the week ended Feb. 1, according to the U.S. Department of Labor, lower than the 335,000 projected by economists. Above, job seekers wait in line for a career fair in New York.
WASHINGTON – Applications for U.S. unemployment benefits fell for the first time in three weeks as employers retained workers to meet demand.
Jobless claims dropped by 20,000 to 331,000 in the period ended Feb. 1, the Labor Department reported Thursday in Washington. The median forecast of economists surveyed by Bloomberg called for a decrease to 335,000.
The decline in dismissals shows employers are confident demand for goods and services will hold up at the same time fiscal restraints ease. A pickup in the pace of hiring and wage growth would help fuel bigger gains in the consumer spending that accounts for almost 70 percent of the economy.
“When you look at the labor market, job destruction has been very, very low,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Fla. Brown projected claims to fall to 330,000. “It’s really been an issue of new hiring. That hiring, we think, is gradually picking up.”
Estimates in the Bloomberg survey of 51 economists ranged from 325,000 to 350,000 after a previously reported 348,000 in the previous week.
Other reports on Thursday showed the U.S. trade deficit widened in December and productivity increased more than forecast in the fourth quarter.
The trade gap expanded 12 percent to $38.7 billion, the Commerce Department said, compared with a median estimate of economists surveyed by Bloomberg that called for a $36 billion gap. Exports showed a broad-based decline after surging in November, while imports edged up on rising consumer demand.
Productivity of U.S. workers increased at a 3.2 percent annualized rate after a revised 3.6 percent gain in the third quarter that was stronger than initially reported, another Labor Department report showed. The median forecast in a Bloomberg survey of economists called for a 2.8 percent advance in the fourth quarter. Labor costs decreased at a 1.6 percent pace, more than estimated.
Stock-index futures held gains after the figures, with the contract on the Standard & Poor’s 500 Index maturing in March rising 0.1 percent to 1,746.1 at 8:52 a.m. in New York.
The four-week average of claims, a less-volatile measure than the weekly figure, rose to 334,000 from 333,750.
The number of people continuing to receive jobless benefits rose by 15,000 to 2.96 million in the week ended Jan 25.
The unemployment rate among people eligible for benefits held at 2.3 percent in the week ended Jan. 25, Thursday’s report showed.
Forty-nine U.S. states and territories reported a decrease in claims during that same week, led by New York and Texas. Three reported an increase. State data are reported with a one- week lag.
While a Labor Department official said there were no special factors in the latest week’s drop in unemployment applications, the agency had to estimate jobless claims for Kansas because of bad weather.
Colder-than-normal weather and snow have been affecting economic data. A wave of arctic cold froze the U.S. Midwest and a wintry storm coated the South with ice and snow last week. The storm was touched off by a new wave of polar air pushing deep into the eastern U.S., where it kept temperatures below zero Fahrenheit (minus 18 Celsius) from Minneapolis to Chicago, triggered winter storm warnings and advisories from Texas to New Jersey and created subzero wind chills from North Dakota to western New York.
Last month was the coldest January since 1994 in the contiguous U.S., in terms of gas-weighted heating degree days, a measure of energy demand, according to the Commodity Weather Group LLC in Bethesda, Md.
First-time applications for unemployment benefits reflect weekly firings and typically drop before job growth picks up. Employers added an average of 182,170 jobs per month last year after 182,750 a month in 2012.
On Wednesday, a report from the ADP Research Institute in Roseland, N.J., showed companies added 175,000 workers in January, the smallest increase in five months. Figures from the Labor Department tomorrow are projected to show a 183,000 increase in payrolls, according to the median forecast. The unemployment rate probably held at 6.7 percent, the lowest since October 2008.
Companies are adjusting to changes in consumer demand. Last month, Wal-Mart Stores Inc., the world’s largest retailer, said it would cut 2,500 employees at its Sam’s Club warehouse division. The discount chain, based in Bentonville, Ark., is seeking to lower costs amid competition from dollar stores and other rivals for lower-income customers.
The cuts, which will include assistant managers and hourly workers, is intended to streamline management at clubs of varying sizes and improve operations, said Bill Durling, head of corporate communications at Sam’s Club.
“We’re always looking at how to be more efficient and effective,” Durling said in a Jan. 24 interview. “We’re doing this so we can position ourselves for future growth.”
Join PBN and two panels of successful female executives, business owners and entrepreneurs as we delve into what women should do to advance their careers, and become leaders in the corporate world and their own enterprises.
PBN's annual Book of Lists has been an essential resource for the local business community for almost 30 years. The Book of Lists features a wealth of company rankings from a variety of fields and industries, including banking, health care, real estate, law, hospitality, education, not-for-profits, technology and many more.