Initial jobless claims dropped by 7,000 to 262,000 in the week ended Feb. 13, the lowest since Nov. 21, a report from the Labor Department showed on Feb. 18. Last week coincided with the period that the government surveys businesses and households to calculate payrolls and the jobless rate for February.
The labor market has exhibited persistent strength despite softer foreign sales, a sign domestic demand is helping the U.S. weather a global slowdown. More hiring and fewer firings that lead to enhanced feelings of job security have the potential to encourage an acceleration in consumer spending.
“Even though it gives us only one side of the labor-market ledger, jobless claims are effectively a gauge on overall business sentiment,” said Millan Mulraine, deputy head of U.S. research and strategy at TD Securities USA in New York. The report is “a good indication that businesses are more inclined to hold on to what they have and add to that, as opposed to reduce their payrolls.”
The median forecast in a Bloomberg News survey called for 275,000 claims after 269,000 a week earlier. Estimates ranged from 255,000 to 285,000.
While there was nothing unusual in the data, claims were estimated for Pennsylvania, Virginia and Puerto Rico, according to the Labor Department.
An agency spokesman said officials in Pennsylvania had issues with their computer system that tabulates the number of applications, while Virginia was delayed in submitting its claims. On an unadjusted basis, Pennsylvania’s filings fell an estimated 3,899 last week, the largest drop of any state or territory.
The four-week average of claims, a less volatile measure than the weekly figures, decreased to 273,250, the lowest since Dec. 19, from 281,250. The latest figure compares with an average of 285,250 during the comparable employment survey period for January. The economy added 151,000 workers in January, the fewest in four months.
The number of people continuing to receive jobless benefits rose by 30,000 to 2.27 million in the week ended Feb. 6. The unemployment rate among people eligible for benefits climbed to 1.7% from 1.6%. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings, and a sustained low level of applications has typically coincided with faster job gains. Layoffs can also reflect company- or industry-specific causes, such as cost-cutting or business restructuring.
Beginning in March of last year, claims have remained below the 300,000 level that economists indicate is consistent with a healthy labor market. Still, the four-week moving average climbed steadily since reaching a 42-year low in October, around the same time that growth began to slow the world’s biggest economy.
Federal Reserve officials will be monitoring progress in the labor market as they contemplate future policy decisions in the wake of financial-market volatility and recession fears. The central bank in December initiated its first interest-rate tightening cycle in almost a decade.