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

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

No states estimated jobless data and there was nothing unusual in the report, a Labor Department spokesman said as the figures were released.

Monthly Average

The four-week average of claims declined to 279,000, the lowest since April 2000, from 281,250 in the prior period.

The number of people continuing to receive benefits fell by 39,000 to 2.35 million in the week ended Oct. 25, the fewest since December 2000. The unemployment rate among people eligible for benefits held at 1.8 percent.

Employers have added an average of more than 227,000 jobs a month so far this year, according to Labor Department data. Tomorrow’s monthly payrolls report may show a gain of 235,000 in October, according to a Bloomberg survey of economists. The unemployment rate is expected to hold at 5.9 percent, the lowest since July 2008.

Private payrolls climbed 230,000 in October, the most since June, after a revised 225,000 gain a month earlier, according to a report yesterday from Roseland, New Jersey-based ADP Research Institute. Employment at service producers rose by 181,000 last month, the group said.

Services Expansion

A measure of services employment from the Institute for Supply Management also rose for a sixth month to reach the highest level in more than nine years.

FedEx Corp. and United Parcel Service Inc. are boosting staffing as they prepare for the holiday-shopping season. Atlanta-based UPS is adding as many as 95,000 temporary workers, 10,000 more than last year, in anticipation that it will deliver 11 percent more packages, even as U.S. export markets cool, according to Chief Executive Officer David Abney.

“Overall, the global economic outlook has been mixed,” Abney said on an Oct. 24 earnings call.