Jobless Claims Fall in Latest Week; 4Q Productivity Slips
Fewer Americans than projected filed applications for unemployment benefits last week, an indication companies are holding on to staff even as cold weather threatens to slow the world's largest economy.
Jobless claims declined by 26,000 to 323,000 in the week ended March 1, fewer than any economist forecast in a Bloomberg survey and the least since the end of November, a Labor Department report showed Thursday in Washington. A Labor Department spokesman said the recent fluctuation coincides with states most affected by winter storms.
Fewer dismissals could set the stage for more robust hiring, in turn spurring consumers to feel more confident and giving them the means to spend more. That would help the economy pick up after a weather-induced slowdown in gauges from housing starts to retail sales early in the year.
"The overall trend here is positive and consistent with a gradually improving job market," said Gennadiy Goldberg, a U.S. strategist at TD Securities in New York. "We have stemmed the bleeding in layoffs, what remains is to add jobs."
The median forecast of 51 economists surveyed by Bloomberg called for 336,000. Estimates ranged from 325,000 to 350,000. The prior week's claims were revised up to 349,000 from an initial reading of 348,000. The Labor Department said no states were estimated last week.
Another report showed worker productivity rose less than previously calculated in the fourth quarter. %VIRTUAL-article-sponsoredlinks%Output per hour climbed at 1.8 percent annualized rate from October through December, less than the prior estimate of a 3.2 percent gain, according to separate Labor Department figures.
Labor costs tied to the gain in efficiency dropped at a 0.1 percent pace following a 2.1 percent decrease in the third quarter. For all of 2013, expenses climbed 1.1 percent, the smallest gain since 2010, when they dropped 1.2 percent.
Stock-index futures held earlier gains after the report. The contract on the Standard & Poor's 500 index (^GPSC) maturing in March climbed 0.2 percent to 1,875.4 at 8:42 a.m. in New York.
Thursday's claims data showed the four-week average, a less-volatile measure than the weekly figure, decreased to 336,500 from 338,500 the week before.
Frigid temperatures and heavy snow in the Northeast and Midwest have weighed on recent economic data. A report from the Commerce Department last month showed retail sales declined in January by the most since June 2012, falling 0.4 percent after a 0.1 percent drop in December. Housing starts dropped 16 percent in January from the prior month, data Feb. 19 showed.
The economy added 146,000 jobs in February, based on the median estimate in a Bloomberg survey of economists, after Labor Department data showed that the U.S. added 113,000 positions for January, missing the median projection of 180,000. The Labor Department is scheduled to release February figures tomorrow.
The number of people continuing to receive jobless benefits decreased by 8,000 to 2.91 million in the week ended Feb. 22, the fewest this year, Thursday's report showed.
Thirty-six states and territories reported a drop in claims, while 17 reported an increase. The unemployment rate among people eligible for benefits held at 2.2 percent. Both pieces of data are also report reported with a one-week lag.
Initial jobless claims reflect weekly firings and typically wane before employment growth picks up.
General Dynamics, a Falls Church, Va.-based defense company, is still letting go workers. The company will eliminate 1,195 call center positions in Houston, with most jobs ending by April 25, it said in a February letter to the Texas Workforce Commission.
Other companies are expanding to help them draw customers. ZipRealty, an Emeryville, Calif.-based residential real estate brokerage, is among them.
"We're increasing our transaction capacity and production pipeline by hiring new agents in the cities we serve," Lanny Baker, president and chief executive officer, said in a March 3 call. "Our growing agent ranks and lead volume gains in 2013 are expected to contribute the transaction volume this year."
Federal Reserve policy makers are focusing on the job market to help guide the pace at which they're reducing stimulus. The Federal Open Market Committee's next meeting ends March 19. The Fed will continue cutting monthly bond purchases by $10 billion per meeting, based on a Bloomberg survey of economists.
The Fed's view on the economy could be complicated by weather distortions.
"What we need to do, and will be doing in the weeks ahead, is to try to get a firmer handle on exactly how much of that set of soft data can be explained by weather and what portion, if any, is due to a softer outlook," Fed Chair Janet Yellen said while speaking to the Senate Banking Committee Feb. 27.
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