Fewer Americans than forecast filed applications for unemployment benefits last week, a sign persistent demand is fueling gains in the labor market.
First-time jobless claims dropped 10,000 to a three-week low of 278,000 in the week ended Nov. 1, the Labor Department reported today in Washington. The median forecast of 50 economists surveyed by Bloomberg called for 285,000. The four- week moving average, a less-volatile measure of job cuts, reached the lowest level in more than 14 years.
Cutbacks in dismissals and increased hiring are sustaining household purchases, which account for 70 percent of the world’s largest economy. Wages that have been slow to pick up remain a headwind for bigger spending gains that would make it easier for the expansion to accelerate.
“The labor market continues to strengthen,” said Ward McCarthy, chief financial economist at Jefferies LLC in New York. “It’s going to continue to gain momentum, but so far the supply-and-demand dynamics in the labor market have not translated into gains in wages.”
Estimates in the Bloomberg survey for initial claims ranged from 275,000 to 300,000 after a previously reported 287,000 in the previous week.
Another report showed productivity rose more than projected in the third quarter, helping to contain labor costs even as employment picks up. The Labor Department’s measure of employee output per hour increased at 2 percent annualized rate, after a revised 2.9 percent pace in the prior three months. Economists forecast a 1.5 percent, according to the Bloomberg survey median.
Labor costs rose 0.3 percent in the third quarter after a 0.5 percent annualized decline, the agency said.
Stock-index futures climbed, after the Standard & Poor’s 500 Index rose to a record, as investors awaited the European Central Bank for clarity on stimulus. The contract on the S&P 500 expiring next month advanced 0.2 percent to 2,023.6 at 8:50 a.m. in New York.
Qualcomm Inc. slid 6.8 percent after saying a Chinese