Jobless claims in U.S. hover near lowest level since 2007

WASHINGTON – The number of Americans filling for unemployment insurance payments last week hovered near the lowest level in almost seven years, showing the job market is making progress.

Jobless claims increased by 2,000 to 304,000 in the week ended April 12 from a revised 302,000 the prior period that was the lowest since September 2007, a Labor Department report showed Thursday in Washington. The median forecast of 47 economists surveyed by Bloomberg called for an increase to 315,000. The total number of people receiving benefits fell to the lowest since the last recession began.

Dismissals are on the decline as companies, already lean from recession-era job cutting, gear up for rising sales as the economy strengthens. Even with the improvement, Federal Reserve Chair Janet Yellen said Wednesday that policy makers must be mindful of how short the U.S. still remains of achieving its goals of full employment and price stability.

“Not only have you had a slowdown in layoffs, but also the total number of people on state benefit rolls has fallen,” said Brian Jones, senior U.S. economist at Societe Generale in New York, who forecast for claims of 305,000. “The labor market is getting better.”

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Stock-index futures held earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in June climbed 0.1 percent to 1,855.4 at 8:42 a.m. in New York.

There was nothing unusual in last week’s data and no states were estimated, a Labor Department spokesman said as the figures were released to the press.

Survey results

Economists’ estimates in the Bloomberg survey ranged from 295,000 to 328,000. The prior week’s claims were revised up from an initial reading of 300,000.

The four-week average of claims, a less-volatile measure than the weekly figure, dropped to 312,000, the lowest since October 2007, from 316,750 the week before.

Claims may be in for some bigger swings in coming weeks as the Easter holiday, which varies from year to year, can complicate the adjustment of claims data for seasonal variations.

The number of people continuing to receive jobless benefits declined by 11,000 to 2.74 million in the week ended April 5, the fewest since December 2007.

The unemployment rate among people eligible for benefits held at 2.1 percent in the week ended April 5, Thursday’s report showed. California and Iowa showed the largest decreases in claims for that week. These data are reported with a one-week lag.

Cutting staff

Initial jobless claims reflect weekly firings and typically decrease before job growth can accelerate. Some companies, such as Oshkosh Corp., are still reducing headcount as they wait for demand to pick up.

Oshkosh, the Wisconsin-based company that sells commercial trucks and supplies blast-resistant trucks to the U.S. Army and Marine Corps, announced plans last week to cut 700 hourly positions starting in June, with another 60 jobs being eliminated the next month.

“We need to reshape our workforce with U.S. defense spending down as a result of tight government budgets and a return to peacetime operations,” John Urias, president of Oshkosh’s defense segment, said in an April 10 statement.

Payrolls expanded by 192,000 in March after a 197,000 gain in February, while the unemployment rate held at 6.7 percent even as more Americans entered the labor force. The steady progress will probably prompt Fed policy makers to continue reducing stimulus while keeping interest rates low.

Yellen’s view

In her first major speech on her policy framework as Fed chair, Yellen said central bankers must not yet be satisfied with the strides the world’s largest economy has made since the recession ended.

“The larger the shortfall of employment or inflation from their respective objectives, and the slower the projected progress toward those objectives, the longer the current target range for the federal funds rate is likely to be maintained,” Yellen said Wednesday to the Economic Club of New York.

The central bank announced last month a $10 billion reduction in monthly bond buying to $55 billion and repeated that it will taper purchases “in further measured steps at future meetings.” The committee announced $10 billion reductions in purchases at the previous two meetings.

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