Jobless claims in U.S. drop to lowest level in five months

WASHINGTON – Filings for U.S. unemployment benefits fell last week to the lowest level in five months as the number of firings remained consistent with a solid labor market.

Jobless claims dropped by 18,000 to 259,000 in the week ended March 5, the fewest since mid-October, from a revised 277,000 in the prior period, a Labor Department report showed Thursday in Washington. The median forecast of 48 economists surveyed by Bloomberg called for 275,000.

Employers are demonstrating an appetite to further add to staff and hold off on firings based on a brighter U.S. outlook, even as overseas growth sputters. A tighter job market is slated to slow the pace of hiring this year as workers await a bigger pickup in wages.

“The fact that claims are not trending up corroborates the positive message from payrolls,” Jim O’Sullivan, chief U.S. economist at High Frequency Economics Ltd in Valhalla, N.Y., said before the report. “The message so far at least is there’s enough domestic momentum to offset most” of the drag from the global slowdown, he said.

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Estimates in the Bloomberg survey for jobless claims ranged from 259,000 to 285,000. The Labor Department revised the prior week’s reading from an initially reported 278,000.

Last week’s reading approached the four-decade low of 255,000 reached in mid-July. It marked a full year of weekly filings lower than the 300,000 level that economists say is consistent with strength in the labor market.

Nothing unusual

No states were estimated last week and there was nothing unusual in the data, a Labor Department spokesman said as the report was released to the press.

The four-week average of claims, a less-volatile measure than the weekly figure, declined to 267,500 from 270,000 in the prior week.

The number of people continuing to receive jobless benefits dropped by 32,000 to 2.23 million in the week ended Feb. 27. The unemployment rate among people eligible for benefits fell to 1.6 percent from 1.7 percent. These data are reported with a one- week lag.

On the hiring side of the labor equation, payrolls climbed more than expected in February to a 242,000 advance, while the unemployment rate held at an eight-year low of 4.9 percent. Average hourly earnings dropped by 0.1 percent last month, which may have been due to a calendar quirk but called into question how soon workers might expect boosts to their paychecks.

Federal Reserve officials next meet March 15-16 in Washington to assess the progress in employment, inflation and growth and to release updated economic projections. Chair Janet Yellen has cited lingering slack in the labor market as one reason to maintain a subdued pace of interest-rate increases.

“We continue to get what Fed officials are calling ‘labor- market improvement’ — more than enough strength to keep the unemployment rate coming down,” O’Sullivan said.

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