New applications for unemployment benefits in the U.S. fell less than forecast last week, indicating the labor market will take time to improve.
Jobless claims decreased by 13,000 to 403,000 in the week ended April 16, Labor Department figures showed today in Washington.
Economists projected a decline to 390,000, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls and those receiving extended payments declined.
The level of claims is little changed from the end of 2010, a sign of an uneven recovery in employment that’s making it difficult for consumer spending, the biggest part of the economy, to accelerate. The lack of faster job growth is one reason Federal Reserve policy makers intend to complete their asset-purchase plan and keep borrowing costs near zero.
“The labor market is improving gradually,” said Joshua Shapiro, chief U.S. economist at MFR Inc. in New York. “We have headwinds due to rising gasoline prices but there will be enough income generation to support moderate growth in consumer spending.”
Jobless benefits applications were projected to drop from 412,000 initially reported for the prior week, according to the median forecast of 47 economists in a Bloomberg survey. Estimates ranged from 370,000 to 410,000.
Stock-index futures trimmed gains after the report. The contract on the Standard & Poor’s 500 Index expiring in June rose 0.4 percent to 1,333.3 at 8:42 a.m. in New York. Treasuries increased, pushing down the yield on the benchmark 10-year note to 3.38 percent from 3.41 percent late yesterday.
Today’s report covers the week the Labor Department surveys businesses to calculate the monthly payroll figures. The four- week moving average, a less volatile measure than the weekly figures, rose to 399,000 last week, the highest since the week of Feb. 19, from 396,750.
The number of people continuing to receive jobless benefits dropped by 7,000 in the week ended April 9 to 3.7 million, the fewest since September 2008.
The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.
Those who’ve used up their traditional benefits and are now collecting emergency and extended payments decreased by about 70,000 to 4.24 million in the week ended April 2.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 2.9 percent, today’s report showed.
Forty-nine states and territories reported an increase in claims, while four reported a decrease. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and tend to fall as job growth — measured by the monthly non-farm payrolls report — accelerates.
“Most districts reported that labor market conditions were generally stronger than in their last reports,” the Fed said in its Beige Book report released April 13. “Wage pressures were reported to be mostly contained.”
The economy added 216,000 jobs in March, the most since May 2010, and unemployment fell to 8.8 percent, the lowest in more than two years, Labor Department figures showed April 1.
The jobless rate will still be 8.5 percent in the fourth quarter, according to the median forecast of economists in a separate Bloomberg survey this month.
Some companies are turning more optimistic about hiring. Oak Brook, Illinois-based McDonald’s Corp. (MCD), the world’s largest restaurant chain by revenue, said it would seek as many as 50,000 workers in the U.S. during its National Hiring Day event on April 19.
Others concerned about challenging macroeconomic conditions include Harley-Davidson Inc. (HOG), the biggest U.S. motorcycle maker. The Milwaukee-based company’s U.S. dealer network is facing “deep competitive discounting,” in part due to “persistently high unemployment, falling home values and low consumer confidence,” John Olin, chief financial officer, said in a teleconference on April 19.
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