LITTLE ROCK — Claims for unemployment benefits dropped last week to the lowest level in four years, the Labor Department said Thursday.
Joblessness claims fell 6,000 to 357,000 in the week that ended Saturday, the fewest since April 2008. The four-week average, a less volatile measure, fell to 361,750, also the lowest in four years.
The number of people on unemployment benefit rolls also dropped, while those getting extended payments increased.
The improved labor market is lifting U.S. consumer confidence and spending, which accounts for 70 percent of the economy. A report today is expected to show the U.S. economy added more than 200,000 jobs in March for a third consecutive month, the longest streak of similar increases since late 1999 to early 2000.
“The labor market is going to continue to gradually heal, though we have a long ways to go,” said Ryan Sweet, a senior economist at Moody’s Analytics Inc. in West Chester, Pa.
Despite the positive report, the Dow Jones industrial average fell 14.61 points to 13,060.14 to end an Easter-shortened trading week.
The more robust job market is bolstering consumer sentiment and spending, an improvement evident in newcar sales, said Don Johnson, vice president of U.S. sales at General Motors Co.
“The good news is that the industry and consumers have been very resilient in the face of higher [gasoline] prices. The steadily improving economy is playing a role, and so is pentup demand and an improved credit market,” Johnson said in a call with analysts this week.
Ford Motor Co. recently raised its 2012 sales forecast to 14.5 million to 15 million vehicles from a previous projection of 13.5 million to 14.5 million.
“We’ve already announced some shift increases, some adds in terms of shifts this year,” Erich Merkle, sales analyst at Ford, said Tuesday during a conference call with analysts.
“So, certainly we’ll be adding some people to fill those shifts.”
A report Wednesday from ADP Employer Services found that company payrolls grew by 209,000 in March, with employment expanding in all major sectors of the economy.
Improved hiring hasn’t led to bigger paychecks. Americans’ income grew just 0.2 percent in February, matching January’s weak increase. And after taking inflation into account, income after taxes fell for a second-straight month. Consumers have boosted their spending by saving less, which economists worry isn’t sustainable.
And some companies are still letting workers go. Yahoo said Wednesday that it is cutting 2,000 jobs, or 14 percent of its work force. It is the Internet company’s sixth mass layoff in the past four years. J.C. Penney said Thursday that it laid off 600 workers at its headquarters in Plano, Texas., or 13 percent of the staff there.
In addition to the unemployment claims, the number of Americans receiving extended benefits under federal programs increased by about 17,000 to 3.26 million in the week that ended March 17.
Twenty-six states and territories reported a decline in claims, while 27, including Arkansas, reported an increase. These data are reported with a one-week lag.
Today’s report from the Labor Department on total payrolls, which includes government workers, is projected to show a gain of 205,000 in March, according to a median forecast of economists surveyed by Bloomberg News. The nation’s unemployment rate is projected to hold at a three-year low of 8.3 percent. In Arkansas, the unemployment rate in February was 7.6 percent.
Information for this article was contributed by Lorraine Woellert, Ainhoa Goyeneche and Timothy R. Homan of Bloomberg News, by Christopher S. Rugaber of The Associated Press, and by Tiffany Hsu of the Los Angeles Times.
Front Section, Pages 1 on 04/06/2012