Fewer Americans than forecast filed for unemployment benefits last week, a sign labour market momentum continues to strengthen.Jobless claims declined by 12,000 to 267,000 in the period ended June 13, the lowest since the week ended May 9, a Labor Department report showed Thursday. The median forecast in a Bloomberg survey of economists called for 277,000 new applications. The figure corresponds to the week the government surveys employers to calculate the monthly payroll data.
The low level of firings indicates employers are optimistic demand will firm as the world's largest economy rebounds from a first-quarter slowdown. While hiring also has picked up and the jobless rate is hovering just above the level policy makers say is consistent with a stable job market, Federal Reserve Chair Janet Yellen said Wednesday that more progress is needed.
Claims have been "mostly been locked in this general range for quite some time now, but still with that underlying downward bias," said Douglas Porter, chief economist at BMO Capital Markets in Toronto and the second-best forecaster of claims over the past two years, according to data compiled by Bloomberg. "The job market remains very strong. I don't think that bigger picture has changed."
Applications for jobless benefits have held below 300,000 for 15 straight weeks. Estimates from 48 economists in the Bloomberg survey for claims ranged from 265,000 to 290,000. Filings in the prior week were unrevised at 279,000.
A separate report showed the cost of living excluding food and fuel rose less than forecast in May, a sign inflation may take time to meet the Fed's goal. The so-called core measure increased 0.1 per cent, the smallest gain this year, after climbing 0.3 per cent in April, the Labor Department said. The overall consumer-price index advanced 0.4 per cent, as fuel costs rebounded.
No states estimated jobless claims last week and there was nothing unusual in the report, an agency spokesman said as the figures were released.
The four-week average of claims, a less-volatile measure than the weekly figure, dropped to 276,750 from 278,750 the week before.
The number of people continuing to receive jobless benefits decreased by 50,000 to 2.22 million in the week ended June 6.
In that same period, the unemployment rate among people eligible for benefits held at 1.7 per cent, the report showed.
Fed policy makers are closely watching labor-market developments as they try to time their first interest-rate increase since 2006. In a Wednesday statement at the conclusion of a two-day policy meeting, Fed officials raised their assessment of the labour market and the economy.
"The pace of job gains picked up," the Federal Open Market Committee said, and "underutilization of labour resources diminished somewhat" since its last meeting in April.
Still, the number of people discouraged by employment prospects and those who are working part-time because they can't find full-time work suggests "that some cyclical weakness in the labour market remains," Yellen added during a press conference. "So, although progress clearly has been achieved, room for further improvement remains."
The median estimate among projections from Fed officials implies two quarter-point rate increases in 2015.
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.
Gap Inc. is among companies trying to cut costs as it struggles to boost revenue. The clothing retailer this week said it will close 175 of its namesake stores in North America as part of a comeback plan for the business, which has posted sales declines for five straight quarters and lagged behind its sister chain Old Navy. The company is also eliminating 250 corporate jobs as part of the move.
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