U.S. Initial Jobless Claims Fell 20,000 Last Week to 278,000
bloomberg.com
Feb. 23 (Bloomberg) -- The number of Americans filing first- time claims for unemployment benefits unexpectedly fell last week, a further sign the labor market is gaining strength.
Initial jobless claims fell by 20,000 to 278,000 in the week ended Feb. 18, the Labor Department said today in Washington. That compares with the weekly average of 326,700 in the past 12 months.
Companies such as Office Depot Inc. and Burlington Northern Santa Fe Corp. are hiring workers as they expand. Job growth and rising wages are prompting consumers to spend more, helping the economy rebound from last quarter's slowdown.
``Business is booming in the U.S. right now,'' said Wayne Wilbanks, chief investment officer at Wilbanks, Smith & Thomas Asset Management LLC, in an interview from Norfolk, Virginia, before the report. ``There are not enough workers to fill all the positions.''
Jobless claims were expected to rise to 300,000 from a previously reported 297,000 a week earlier, according to the median forecast of 36 economists surveyed by Bloomberg News.
The four-week moving average of initial claims, a less volatile measure, fell to 281,750 last week from 283,250.
Continuing claims rose by 41,000 in the week ended Feb. 11 to 2.495 million. The four-week average fell to 2.5 million from 2.519 million. The figures are reported with a one-week lag.
The unemployment rate among people eligible for benefits, which tends to track the U.S. jobless rate, was unchanged at 1.9 percent in the week ended Feb. 11.
Thirty-nine states and territories reported fewer filings while 14 reported more.
Warmest January
Weekly claims of 300,000 suggest that monthly non-farm payrolls will grow by about 200,000, Zoltan Pozsar, economist at Moody's Economy.com in West Chester, Pennsylvania, estimates. The unemployment rate fell to a four-year low of 4.7 percent last month, and employers added 193,000 new jobs.
The warmest January on record pushed jobless claims to their lowest since early 2000 as builders began construction projects early, propelling housing starts to their highest in almost 33 years. Colder weather in February helped increase claims to a level closer to their 12-month average.
Retail sales jumped 2.3 percent in January, the biggest increase since May 2004, reflecting bigger paychecks and lower unemployment. Hourly pay rose 3.3 percent in January from a year earlier, the most since February 2003.
Growth Forecast
Economists at Lehman Brothers Holdings Inc. raised their forecast for first-quarter economic growth to an annual rate of 5.5 percent from 4.8 percent after the retail sales report. The economy expanded at a 1.1 percent pace in the fourth quarter of last year, the slowest in three years, according to a preliminary government report on Jan. 27.
A tightening labor market, along with higher energy prices and factories that are running closer to full capacity, may encourage the Federal Reserve to extend the longest cycle of interest-rate increases in a quarter century.
The Fed on Jan. 31 boosted its overnight lending rate by a quarter point to 4.5 percent, the 14th consecutive increase. Economists surveyed by Bloomberg predict at least one more quarter- point rate increase this year.
Fed Chairman Ben S. Bernanke, in his first report to Congress on Feb. 16, said the economy is in a sustained expansion.
``I believe as the labor market continues to strengthen now, that we'll see real wages rising as well,'' Bernanke said.
Chief executives plan to step up hiring, according to a Feb. 16 survey by the Business Council. Twenty-six percent of executives said they expect to hire more people this year, twice the proportion in the previous survey in October.
Railroad Work
``We did open about 100 stores in 2005 and we intend to open another 100 stores or more in 2006,'' Office Depot's chief financial officer, Patricia McKay, said in an interview in Boca Raton, Florida, on Feb. 16. ``It's not inconsequential.''
Burlington Northern Santa Fe Corp. plans to increase its 47,000-person workforce by 1,500 this year, according to Chief Executive Matthew Rose.
``We're hiring net adds, not just replacement people, but we're actually growing our workforce,'' said Rose, who heads the second-largest U.S. railroad, in an interview in Boca Raton. |
