A job seeker (right) speaks with a representative of Cintas Corp during the Veterans Career Fair at the MacArthur Museum in Little Rock, Arkansas. Jobless claims in the US fell 15,000 to 281,000 in the week ended July 11 from a revised 296,000 in the prior period, a Labour Department report showed yesterday.
Bloomberg/Washington
Filings for US unemployment benefits declined last week for the first time in a month, heading back toward the lowest levels in more than a decade and signalling firings remain muted.
Jobless claims fell 15,000 to 281,000 in the week ended July 11 from a revised 296,000 in the prior period, a Labour Department report showed yesterday in Washington. The median forecast of 46 economists surveyed by Bloomberg called for 285,000.
Jobless claims can see-saw at this time of year as automakers shutter plants to retool operations for the new-model year, making it more difficult to discern the underlying trend. Firings have held below 300,000 for 19 consecutive weeks, the longest streak since 2000 and a sign of a stronger labour market. “Claims are consistent with ongoing labour market improvement,” said Sean Incremona, senior economist at 4Cast Inc in New York, whose forecast for 280,000 filings tied for the closest in the Bloomberg survey. “Claims continue to tell us that not many people are losing their jobs.”
Stock-index futures held earlier gains after the report. The contract on the Standard & Poor’s 500 Index maturing in September climbed 0.4% to 2,112.3 at 8:44am in New York as Greece’s approval of austerity measures eased concern of a spillover from its crisis.
Estimates in the Bloomberg survey for jobless claims ranged from 260,000 to 296,000. The Labour Department revised the prior week’s reading from an initially reported 297,000.
The number of applications dropped to 262,000 in late April, the lowest since 2000.
No states were estimated last week and there was nothing unusual in the data, a Labour Department spokesman said as the report was released to the press.
Auto-plant shutdowns will probably continue to affect the figures for at least another two weeks, Incremona said.
The four-week average of claims, a less-volatile measure than the weekly figure, increased to 282,500 from 279,250 in the prior week.
The number of people continuing to receive jobless benefits dropped by 112,000 to 2.22mn in the week ended July 4. The unemployment rate among people eligible for benefits declined to 1.6% from 1.7%. These data are reported with a one-week lag.
Beyond the annual re-tooling period, labour negotiations might impact the auto industry’s unemployment filings. Ford Motor Co is scheduled to begin contract talks with the United Auto Workers union July 23 to replace a deal that expires in September.
The Dearborn, Michigan-based automaker aims to lower its labour costs. Ford’s average US hourly labour expense, including benefits, is $57, about $9 more than at Toyota Motor Corp and Fiat Chrysler Automobiles NV’s US unit, according to the Center for Automotive Research in Ann Arbor, Michigan.
The other side of the employment equation has shown resilience in 2015 even as growth was uneven in the first half. Hiring gains have averaged 208,330 a month this year after a 259,670 average in 2014 that was the best since 1999.
Gross domestic product in the US fell at a 0.2% annualised rate in the three months ended March, the slowest pace in a year, according to Commerce Department data. Economists project GDP accelerated to a 2.7% pace from April through June, according to a Bloomberg survey ahead of the July 30 release on second-quarter growth.
Federal Reserve officials are looking for further signs of firming employment and robust demand as they consider raising the benchmark interest rate for the first time since 2006.
While the unemployment rate is at a seven-year low and there are fewer employed part-time who want full-time work, Fed chair Janet Yellen this week said “there is still some slack” in the job market.
“Too many people are not searching for a job but would likely do so if the labour market was stronger,” Yellen said on Wednesday in testimony before the House Financial Services Committee. “Although there are tentative signs that wage growth has picked up, it continues to be relatively subdued.”
The economic outlook will be bright enough for Fed officials to announce an interest-rate increase at their September meeting, according to the majority of economists surveyed by Bloomberg in July.
