In this file photo a worker unloads parts from a stamping machine at the General Motors Pontiac Metal Center in Pontiac, Mich.Carlos Osorio/The Associated Press
Fewer Americans than forecast filed applications for unemployment benefits last week, dropping the average over the past month to the lowest in 15 years, indicating companies are holding on to workers.
Jobless claims increased by 3,000 to 265,000 in the week ended May 2, a Labor Department report showed Thursday in Washington. The median forecast of 47 economists surveyed by Bloomberg projected 278,000. The four-week average, a less– volatile measure, fell to 279,500, the least since May 2000.
The dearth of applications for unemployment benefits shows demand remains strong enough for employers to maintain staffing levels. A report Friday may answer the question of whether they also need to continue beefing up headcounts after the economy slowed in the first quarter.
"Claims at these types of levels would be consistent with a strong payroll number," said Ray Stone, an economist at Stone & McCarthy Research Associates in Princeton, New Jersey, who correctly predicted the applications figure. Jobless claims "are the most timely indicator of labor-market conditions, so on the margin things look pretty good."
Stone forecasts employment climbed by 300,000 in April.
Another report Thursday showed consumer confidence declined last week to a two-month low as attitudes about the economy dimmed, particularly among those at the bottom rung of the income ladder.
Less Comforted
The Bloomberg Consumer Comfort Index decreased to 43.7 in the week ended May 3, the fourth straight decline, from 44.7 the prior period. Sentiment among those making less than $15,000 a year slumped by the most since January 2011. For those earning more than $100,000, it held above 70 for a fifth week, the longest such streak in eight years.
The difference in sentiment between those at opposite ends of the income scale was 50.5 points, the second-biggest gap since November 2007.
Stocks fluctuated between gains and losses as investors waited for Friday's jobs data. The Standard & Poor's 500 Index fell 0.1 per cent to 2,077.26 at 10:05 a.m. in New York.
Jobless claims estimates in the Bloomberg survey of economists ranged from 260,000 to 295,000. The prior week's claims were unrevised at 262,000, the lowest level since April 2000.
Continuing Claims
The number of people continuing to receive jobless benefits dropped by 28,000 to 2.23 million in the week ended April 25, the fewest since November 2000.
In that same period, the unemployment rate among people eligible for benefits held at 1.7 per cent, where it's been since mid-March, the report showed.
Initial jobless claims reflect weekly firings and typically decrease before job growth can accelerate. Many layoffs now reflect company– or industry-specific causes, such as cost– cutting or business restructuring.
Zoetis Inc., the animal-health drug maker that was spun off from Pfizer Inc., will fire as many as 2,500 workers – about one-quarter of its work force – after facing pressure from activist investor Bill Ackman to trim costs.
The Florham Park, New Jersey-based company will close or sell 10 manufacturing sites and will reduce its geographical divisions from four to two, among other measures, in an effort to cut $300-million in annual costs by 2017, the company said Tuesday in a statement.
Firing Announcements
Other figures Thursday were less sanguine about recent firings. Job-cut announcements surged 52.8 per cent in April from the same month last year, the biggest jump since mid-2013, according to figures from Challenger, Gray & Christmas Inc., a Chicago-based placement firm.
Of the 61,582 dismissals planned, 34 per cent, or 20,675, were directly attributed to the slump in oil prices, Challenger said.
Federal Reserve Chair Janet Yellen and her colleagues are keeping an eye on the labor market as they consider the appropriate time to raise their benchmark interest rate from near zero.
The Labor Department's April employment report, due Friday at 8:30 a.m., is projected to show payrolls grew by 230,000 last month, and the unemployment rate probably fell to 5.4 per cent from 5.5 per cent in March, according to the Bloomberg survey median.
April's payroll growth would follow an increase of 126,000 in March that was the weakest increase in over a year. Average hourly earnings, which typically rise faster as the labour market tightens, are projected to increase 2.3 per cent in April from the year before, which would be the biggest gain since August 2013.