(Bloomberg News) Fewer Americans than forecast filed first-time applications for unemployment benefits last week, easing concern that post-holiday firings were on the rise.
Claims plunged by 50,000 to 352,000 in the week ended Jan. 14, the lowest level since April 2008, Labor Department figures showed today in Washington. The median forecast of 41 economists in a Bloomberg News survey projected 384,000. A Labor Department spokesman said the decrease reflected volatility seen during this time of year. The four-week average, which smoothes out fluctuations, decreased to 379,000 last week from 382,500.
Companies are slowing the pace of firings and beginning to step up the pace of hiring even as a slump in Europe spurred by a default crisis may limit U.S. growth. The improvement may be a sign that companies are looking to expand their workforces as sales climb.
"You've got a gradual improvement in the labor market," said Brian Jones, a senior U.S. economist at Societe Generale in New York, whose forecast of 363,000 was the lowest. Because of "choppiness with the beginning of the calendar year, you have to look at the four-week moving average" which he said was "encouraging."
Other data today showed housing starts in December dropped more than forecast and consumer prices were little changed.
Stock-index futures held earlier gains after the reports. The contract on the Standard & Poor's 500 Index maturing in March rose 0.4 percent to 1,307.7 at 8:36 a.m. in New York. Treasury securities fell, sending the yield on the benchmark 10- year note up to 1.93 percent from 1.90 percent late yesterday.
Cost Of Living
The cost of living was little changed for a second month as stores cut prices to boost holiday sales, the Labor Department said. The median forecast called for a 0.1 percent gain, according to a Bloomberg survey of 78 economists. Excluding volatile food and fuel costs, the so-called core rose 0.1 percent as projected.
Housing starts dropped 4.1 percent to a 657,000 annual rate last month, reflecting a slump in multifamily dwellings, Commerce Department figures showed. Building permits, a proxy for future construction, were little changed.
Jobless claims were projected to decrease from 399,000 initially reported for the prior week, according to the Bloomberg survey. Estimates ranged from 363,000 to 405,000. The Labor Department revised the previous week's figure up to 402,000.