Jobless Claims in US Decreased More Than Forecast Last Week

Bloomberg News

Fewer Americans than projected filed applications for unemployment benefits last week, indicating the U.S. labor market is improving.

Jobless claims declined by 42,000 to 338,000 in the week ended Dec. 21, a Labor Department report showed today in Washington. The median forecast of 42 economists surveyed by Bloomberg called for a drop to 345,000. Continuing claims rose.

The year-end holidays make it difficult to adjust for fluctuations in applications for jobless benefits, a Labor Department official said as the figures were released. Other data show a pickup in employment is helping boost personal spending, which accounts for almost 70 percent of the economy.

'The level of claims is still consistent with a healthy labor market turnover,' Yelena Shulyatyeva, a U.S. economist at BNP Paribas in New York, said before the report. 'The momentum for payrolls is getting better.'

Economists' estimates in the Bloomberg survey ranged from claims of 310,000 to 365,000. In the prior week, claims rose to a revised 380,000 from a previously reported 379,000.

Stock-index futures held gains after the figures. The contract on the Standard & Poor's 500 Index expiring in March rose 0.2 percent to 1,832.2 at 8:33 a.m. in New York.

The jobless claims report showed the four-week moving average, a less volatile measure than the weekly figures, rose to 348,000 last week from 343,750.

Continuing Claims

The number of people continuing to receive jobless benefits increased by 46,000 to 2.92 million in the week ended Dec. 14, the highest since August. The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.

Those who've used up their traditional benefits and are now collecting emergency and extended payments decreased by about 40,700 to 1.33 million in the week ended Dec. 7.

The unemployment rate among people eligible for benefits held at 2.2 percent in the week ended Dec. 14.

Thirty-five states and territories reported a decline in claims, while 18 reported an increase. These data are reported with a one-week lag.

Initial jobless claims reflect weekly firings and typically wane before job growth can accelerate.

Southwest Hiring

Employment at U.S. passenger airlines is showing signs of stabilizing, according to the Transportation Department's Bureau of Transportation Statistics, spurring more competition for jobs. Southwest Airlines Co., which last hired flight attendants from outside the company in 2011, received applications at a rate of 80 a minute, amassing 10,000 resumes for 750 openings.

'It was the first time we did that in a while, and of course anytime we do it, it's like opening up the floodgates,' Chief Executive Officer Gary Kelly told employees in a weekly recorded message.

Payrolls expanded by 203,000 workers in November after a 200,000 gain in October, and the jobless rate fell to a five-year low of 7 percent, according to Labor Department figures.

The improvement in the economy and job market helps explain why the Federal Reserve decided to begin reducing stimulus. The central bank on Dec. 18 said it will trim monthly bond purchases to $75 billion from $85 billion starting in January.

Fed officials also raised their assessment of the outlook for the job market, predicting the unemployment rate will fall as low as 6.3 percent by the end of next year, compared with a September projection of 6.4 percent to 6.8 percent.

To contact the reporter on this story: Shobhana Chandra in Washington at schandra1@bloomberg.net

To contact the editor responsible for this story: Christopher Wellisz at cwellisz@bloomberg.net