New claims for unemployment benefits drop slightly

Bloomberg News

Fewer Americans filed claims for jobless benefits last week, bringing the average over the past month to the lowest level since 2008, as the economic recovery prompted companies to retain staff.

Initial jobless applications declined by 6,000 to 439,000 in the week ended March 27, in line with the median forecast of economists surveyed by Bloomberg News, Labor Department figures showed Wednesday. The number of people receiving unemployment insurance was little changed, while those getting extended benefits rose.

Employers are slowing job cuts, a sign of confidence, as the U.S. emerges from the worst recession since the 1930s. Sustained employment gains are needed to boost consumer spending, which accounts for about 70 percent of the economy.

“We are turning a corner in the labor market,” said Julia Coronado, a senior U.S. economist at BNP Paribas in New York, who had forecast a decline in the weekly jobless claims. “Businesses are gradually starting to have more confidence in the recovery.”

Economists forecast weekly claims would fall to 440,000, from a previously estimated 442,000 for the week ended March 20, according to the median of 46 projections in a Bloomberg News survey. Estimates ranged from 420,000 to 455,000.

Employers announced fewer job cuts in March than a year earlier, another report showed today. Planned firings fell 55 percent last month to 67,611 from 150,411 a year earlier, according to data collected by the job placement firm Challenger, Gray & Christmas Inc. Announcements increased from February’s three-year low of 42,090.

Companies unexpectedly cut payrolls in March, a report from ADP Employer Services showed yesterday. The 23,000 decline in payrolls was the smallest in two years and followed a revised 24,000 drop the prior month.

The four-week moving average of claims, a less volatile measure than the weekly figures, decreased to 447,250 last week, the lowest level since September 2008, Wednesday’s report showed.

The number of people continuing to receive jobless benefits decreased by 6,000 in the week ended March 20 to 4.66 million. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.

The number of people who’ve used up their traditional benefits and are now collecting emergency and extended payments climbed by about 264,000 to 6.03 million in the week ended March 13.

The unemployment rate among people eligible for benefits, which tends to track the jobless rate, held at 3.6 percent in the week ended March 20, the report showed. Thirteen states and territories had an increase in claims for that same week, while 40 showed a decrease, led by California.

Payrolls declined by 36,000 in February, the Labor Department said on March 5. Economists anticipate employers added about 180,000 jobs in March, according to a Bloomberg survey before tomorrow’ report.

The jobless rate in March is projected to hold at 9.7 percent for a third consecutive month, the survey median showed. The unemployment rate has not increased since reaching a 26-year high of 10.1 percent in October.