Applications for U.S. unemployment benefits unexpectedly fell last week to the lowest level in two months, a sign the labor market is improving.
Initial jobless claims dropped by 3,000 to 450,000 in the week ended Sept. 11, Labor Department figures showed today in Washington. The median forecast was for a rise to 459,000, according to a Bloomberg News survey. The total number of people receiving unemployment insurance fell, and those getting extended payments plunged.
While the pace of staffing reductions has slowed, hiring is needed to foster bigger gains in consumer spending, which accounts for 70 percent of the economy. Economists surveyed by Bloomberg News this month forecast unemployment will hold above 9 percent through next year, a sign it will take years to recover the more than 8 million jobs lost in the recession.
“The labor market is slowly getting back on track,” Ryan Sweet, a senior economist at Moody’s Economy.com in West Chester, Pennsylvania, said before the report. “Businesses are still cautious about hiring, but the strong recovery in profits is giving firms the cash flow they need to invest.”
Jobless benefits applications were projected to rise from a previously reported 451,000 for the prior week, according to the median forecast of 42 economists in the Bloomberg survey. Estimates ranged from 435,000 to 476,000. Filings last week were the lowest since July 10.
The four-week moving average, a less volatile measure than the weekly figures, declined to 464,750 last week from 478,250, today’s report showed.
The number of people continuing to receive jobless benefits fell by 84,000 in the week ended Sept. 4 to 4.49 million. They were forecast to drop to 4.46 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 slumped by 507,853 to 4.96 million in the week ended Aug. 28.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 3.5 percent in the week ended Sept. 4 from 3.6 percent.
Thirty-five states and territories reported a decline in claims, while 18 reported an increase. These data are reported with a one-week lag. Last week, claims figures in Virginia and Nebraska were estimated, a Labor Department official said as the numbers were released.
Initial jobless claims reflect weekly firings and tend to fall as job growth — measured by the monthly non-farm payrolls report — accelerates.
Companies added 67,000 workers to their payrolls in August, the Labor Department said Sept. 3. Overall employment dropped by 54,000 for a second month, as the government let go census workers. The unemployment rate rose to 9.6 percent from 9.5 percent.
MF Global Holdings Ltd., the futures and options broker headed by former New Jersey Governor Jon Corzine, may add as many as 1,000 positions as it expands into money management and investment banking.
“We’re a broker on our way to being a broker-dealer on our way to being a full-line investment bank,” Corzine said Sept. 13 at the Barclays Global Financial Services Conference in New York. “I would expect that two years from now when I’m at this conference, we will not be a 3,000-person firm. We’ll be a 4,000-person firm.”
At the same time, other companies are reducing their payrolls. Boeing Co., the second-largest U.S. defense contractor, is revamping its military aircraft business, eliminating 10 percent of executive positions and consolidating the unit to four divisions from six.
The job cuts are part of an effort by Dennis Muilenburg, chief of Boeing’s defense unit, to cut as many as 400 positions, Damien Mills, a spokesman for Chicago-based Boeing said in a telephone interview last week.
President Barack Obama wants Congress to boost job growth by approving $50 billion to repair and rebuild the U.S. transportation infrastructure, permanently extend a research and development tax credit and let businesses deduct the full cost of capital investments in the year the expenditures are made, instead of writing them off over periods of as long as 20 years.
President Obama’s approval ratings have slipped as economic growth slowed this year and employment stagnated. Fifty-six percent of voters said they disapproved of his handling of the economy, according to a poll by Quinnipiac University taken Aug. 31 to Sept. 7.
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