Applications for U.S. unemployment benefits fell last week to the lowest level in a month as improvements in the economy prompted employers to retain workers.
Unemployment claims declined by 15,000 to 330,000 in the period ended Saturday, the Labor Department said Thursday. The median forecast of 47 economists surveyed by Bloomberg projected 335,000. The data can be volatile after Christmas as temporary workers are dismissed, a Labor Department spokesman said as the report was released.
Employers are probably becoming more confident the economy will pick up as consumer spending improves and fiscal policy becomes less restrictive after lawmakers agreed on ways to limit budget cuts scheduled for this year, analysts said. A report today is projected to show that the employment gain for 2013 was the biggest in eight years.
“The labor market is continuing to strengthen as we go into 2014,” said Kevin Cummins, an economist at UBS Securities LLC in Stamford, Conn. “We should continue to see the unemployment rate go lower.”
Estimates in the Bloomberg survey ranged from 305,000 to 355,000. The Labor Department revised the previous week’s claims to 345,000 from a previously reported 339,000.
No state estimates were made for last week, according to the report. Companies typically let go of temporary staff members after Christmas, which means claims may seesaw through January, the Labor Department spokesman said.
The four-week average of claims, a less-volatile measure than the weekly figure, dropped to 349,000 from 358,750.
The number of people continuing to receive unemployment benefits climbed by 50,000 to 2.87 million in the week ended Dec. 28.
The unemployment rate among people eligible for benefits held at 2.2 percent, where it’s been since early December, Thursday’s report showed.
Twenty-nine states and territories reported an increase in claims, while 24 reported a decrease. State data are reported with a one-week lag.
Lawmakers in Washington are debating whether to extend federal emergency payments for the long-term unemployed. That aid expired Dec. 28, ending unemployment benefits to about 1.3 million job-seekers. A measure to extend the program for three months cleared a key procedural hurdle in the Senate on Monday.
The federal prog ram started in 2008 and at one point provided as many as 99 weeks of benefits. At the end of 2013 the maximum was 73weeks, including 26 weeks of standard state-funded benefits.
First-time claims for unemployment insurance reflect weekly firings and typically drop before job growth picks up. Employers added an average 188,550 jobs per month last year through November, beating 2012’s monthly tally of 182,750.
On Wednesday, a report from the ADP Research Institute showed companies added 238,000 workers in December, the biggest increase since November 2012. Today’s Labor Department report may show total payrolls rose by 196,000 last month, according to a Bloomberg survey median. That would bring the total for the year to 2.27 million, the most since 2005.
Job gains and other signs of economic growth prompted the Federal Reserve to begin reducing its monthly bond purchases to $75 billion this month from $85 billion.
At the central bank’s December meeting, some members of the Federal Open Market Committee “expressed the view that the criterion of substantial improvement in the outlook for the labor market was likely to be met in the coming year if the economy evolved as expected,” meeting minutes showed Wednesday.
The rosier outlook has some companies hiring. Drugstore operator CVS Caremark Corp., based in Woonsocket, R.I., hired 1,000 nurse practitioners last year as it expanded its network of in-store clinics. Atlanta-based chemical manufacturer Zep Inc. plans to add sales staff as demand picks up.
“The biggest reason why people are feeling better about the economy and returning to showrooms is the progress that has been made on the jobs front,” General Motors Co. Vice President Kurt McNeil said on a Jan. 3 earnings call. “That’s the keyto releasing even more pentup demand in 2014.”
Other employers continue to look for ways to cut back. Macy’s Inc., the second-largest U.S. department-store company, on Wednesday said it will eliminate about 2,500 jobs to cut costs. The company also said it will close five stores in Arizona, Kansas, Missouri, New York and Utah, and that its workforce will remain about 175,000 as it adds employees in other parts of the company.
Business, Pages 27 on 01/10/2014