(Bloomberg) — Fewer Americans than forecast filed applications for unemployment benefits last week, a sign the job market is making progress as the year ends.
Jobless claims dropped by 9,000 to 280,000 in the week ended Dec. 20, the fewest since early November, from 289,000 in the prior period, a Labor Department report showed today in Washington. The median forecast of 47 economists surveyed by Bloomberg called for 290,000. No states estimated data and there was nothing unusual in the report, a spokesman said as the figures were released.
Rising demand is encouraging businesses to hold the line on dismissals and take on more workers. Better job prospects and cheaper fuel costs signal consumer spending, the biggest part of the economy, will provide another boost to the expansion this quarter following growth from July through September that was the strongest in more than a decade.
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"This is hinting at ongoing improvement in the labor market," said Gennadiy Goldberg, a U.S. strategist at TD Securities USA LLC in New York, who correctly projected the drop in claims. The lack of dismissals "allows hiring to better translate into a decline in the unemployment rate."
Stock-index futures held earlier gains after the report. The contract on the Standard & Poor's 500 Index maturing in March climbed 0.1 percent to 2,081.3 at 8:35 a.m. in New York.
Survey results
Economists' estimates in the Bloomberg survey ranged from claims of 275,000 to 300,000. The previous week's figure was unrevised.
The four-week moving average, a less volatile measure than the weekly figures, declined to 290,250 last week from 298,750.
The number of people continuing to receive jobless benefits climbed by 25,000 to 2.4 million in the week ended Dec. 13. The unemployment rate among people eligible for benefits held at 1.8 percent. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and typically decline before job growth accelerates.
Gross domestic product grew at a 5 percent annual rate in the third quarter, the biggest advance since 2003, revised figures from the Commerce Department showed yesterday. Household purchases, which account for almost 70 percent of the economy, rose at a 3.2 percent annual pace and contributed 2.2 percentage points to growth.
Demand for labor continues to expand. The economy has added 2.65 million workers to payrolls so far this year, the biggest annual gain since 1999. The jobless rate in November held at 5.8 percent, the lowest since 2008.
Payroll gains
Recent reports show the improvement in the job market is broad-based across the nation. Payrolls rose in 37 states in November from Vermont to Hawaii and the unemployment rate fell in 41, according to data on state employment.
Some companies are trimming labor expenses. The New York Times will fire 21 union employees starting Dec. 16, according to the union, exceeding the total job cuts the newspaper publisher had originally said were needed to reduce costs.
New York Times Co. had accepted the buyout applications of 57 union employees and almost 30 non-union workers, the New York Times unit of the Newspaper Guild of New York said in a statement on its website. The union said it didn't know how many non-union employees may be fired.
With assistance from Chris Middleton in Washington.
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