By Jeanna Smialek
WASHINGTON - Fewer Americans than projected filed applications for unemployment benefits last week, a sign that the job market is sustaining recent gains.
Jobless claims decreased by 23,000 to 340,000 in the week ended May 18, Labor Department figures showed today in Washington. The median forecast of 50 economists surveyed by Bloomberg called for a drop to 345,000. No states were estimated and there was nothing unusual in the data, a Labor Department spokesman said.
Falling dismissals could lay the groundwork for a hiring pickup should the economy be able to overcome the federal budget cuts that are projected to curb the expansion. Federal Reserve Chairman Ben S. Bernanke yesterday said the job market is still weak, one reason why policy makers will continue buying bonds in a bid to keep interest rates low and spur growth.
“We’re definitely moving in the right direction,” said Carl Riccadonna, a senior U.S. economist at Deutsche Bank Securities Inc. in New York, who correctly predicted the drop in applications. “If we can get back to 330,000 or lower, that’s going to be an early sign that the economy is accelerating into the second half of the year.”
Stock-index futures held earlier losses after the report as data showed Chinese manufacturing unexpectedly shrank and equity markets from Europe to Japan tumbled. The contract on the Standard & Poor’s 500 Index maturing in June fell 1 percent to 1,638.5 at 8:44 a.m. in New York.
Economists’ estimates in the Bloomberg survey ranged from 338,000 to 360,000. The Labor Department revised the previous week’s figure to 363,000 from an initially reported 360,000.
The four-week moving average, a less volatile measure than the weekly figures, dropped to 339,500 last week from 340,000.
Today’s report corresponds to the week the Labor Department surveys businesses to calculate the May payroll data. The four- week average for this month’s survey period was down from 362,000 in the comparable week in April, when the data turned volatile because of the Easter holiday.
Initial jobless claims reflect weekly firings and tend to fall as job growth, which is measured by the monthly non-farm payrolls report, accelerates.
The number of people continuing to receive jobless benefits decreased by 112,000 to 2.91 million in the week ended May 11, the fewest since March 2008, according to today’s the report. 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 dropped by about 15,500 to 1.78 million in the week ended May 4.
The unemployment rate among people eligible for benefits held at 2.3 percent in the week ended May 11, today’s report showed.
Thirty-one states and territories reported a decrease in claims, while 22 reported an increase. These data are reported with a one-week lag.
A two percentage-point rise in the payroll tax at the start of 2013 and $85 billion in automatic spending cuts that began on March 1 are threatening growth. The economy may cool to a 1.6 percent pace this quarter, after growing at a 2.5 percent rate in the first three months of 2013, according to the median forecast in a Bloomberg economist survey from May 3 to May 8.
Caterpillar Inc., the world’s largest maker of construction and mining equipment, has made job cuts. The company saw global total machine retail sales fall 9 percent in the three months through April from a year ago, smaller than the 11 percent drop in the quarter through March, the Peoria, Illinois- based company said May 20 in a filing.