More Americans than forecast filed applications for unemployment benefits last week, a sign that the labor market is taking time to improve.
Jobless claims fell by 1,000 to 388,000 in the week ended April 21 from a revised 389,000 the prior period that was the highest since early January, Labor Department figures showed today inWashington. The median forecast of 48 economists surveyed by Bloomberg News called for a drop to 375,000.
Fewer layoffs are needed to lay the groundwork for more hiring, which in turn should support consumer spending, the biggest part of the economy. Federal Reserve policy makers yesterday said that while labor-market conditions have improved, the unemployment rate “remains elevated,” helping explain why they stuck to a plan to hold borrowing costs close to zero through 2014.
“It’s just so hard for companies to be confident and start hiring,” said Yelena Shulyatyeva, a U.S. economist at BNP Paribas inNew York, who correctly projected the level of jobless claims. “We believe that March is probably not the end of the modest readings on payrolls.”
Estimates in the Bloomberg survey ranged from 355,000 to 390,000. The Labor Department revised the previous week’s figure from 386,000. Claims in the week ended April 14 were the highest since Jan. 7.
Stock-index futures extended losses after the figures. The contract on the Standard & Poor’s 500 Index expiring in June fell 0.3 percent to 1,383 at 8:42 a.m. in New York. The yield on the benchmark 10-year Treasury note dropped to 1.94 percent from 1.98 percent late yesterday.
The four-week moving average, a less-volatile measure than the weekly figures, climbed to 381,750 last week, the highest since Jan. 7, from 375,500.
The number of people continuing to receive jobless benefits rose to 3.32 million in the week ended April 14 from 3.31 million.
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 60,000 to 3.14 million in the week ended April 7.
Claims by State
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 2.6 percent in the week ended April 14. Thirty-seven states and territories reported a decrease in claims, while 16 reported an increase. 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.
Employers added 120,000 jobs in March, half as many as in February and the fewest in five months, according to payrolls figures released on April 6. The jobless rate fell to 8.2 percent from 8.3 percent the prior month.
“Labor market conditions have improved in recent months; the unemployment rate has declined but remains elevated,” the Federal Open Market Committee said yesterday in a statement. “The committee expects economic growth to remain moderate over coming quarters and then to pick up gradually. Consequently, the committee anticipates that the unemployment rate will declined gradually toward levels that it judges to be consistent with its dual mandate.”
CSX Corp. (CSX), the biggest U.S. eastern railroad, is hiring mostly to keep headcount stable.
“Last year, you may recall we hired 4,000 people --roughly 3,000 was attrition, the other 1,000 was evenly split between train and engine crews to move the products” and others to install safety systems to comply with regulations, Michael Ward, chief executive officer at CSX, said in an April 18 interview. “So those people were hired. This year the 3,000 will be largely attrition.”
Companies like AMR Corp. (AAMRQ)’s American Airlines are still cutting workers. The airline said last week it will eliminate 1,200 airport agent, baggage and cargo jobs.
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