Applications for unemployment benefits fell
unexpectedly last week to an almost four-month low, signaling many employers are
confident in the outlook for demand. Jobless claims decreased by 10,000 to 311,000 in the period ended
March 22, in the latest report from the Department of Labor.
The median forecast of 49 economists surveyed by Bloomberg called
for 323,000 claims. The four-week average of applications filed with state
agencies dropped to the lowest level since September. Estimates in the
Bloomberg survey ranged from 295,000 to 335,000 after a previously reported
320,000 in the prior week.
Separate figures from the Commerce
Department showed the U.S. economy expanded more than previously estimated in
the final three months of 2013. Gross domestic product climbed at a 2.6 percent
annualized rate in the fourth quarter, revised from 2.4 percent, reflecting in
part more spending on health care.
Employers signaled a bit more optimism
about the economy in February as they took on more workers. The 175,000
increase in payrolls was the biggest in three months. And the slower pace of
firings allows employers to add staff when sales pick up after the unusually
harsh winter weather hampered first-quarter growth.
At the same time, faster job growth
depends on stronger demand and a Bloomberg survey of economists earlier this
month shows job gains will be on par with past years. Employment will increase
192,000 a month in 2014, according to the median projection. That compares with
194,250 last year and 186,330 in 2012.
Federal Reserve policy makers are
counting on sustained improvement in the job market as they wind down their
unprecedented bond-buying program and consider when to raise interest rates.
The outlook for persistent job growth
is one reason Fed officials have adhered to plans to make further cuts to
stimulus this year. The central bank reduced its monthly pace of bond purchases
by $10 billion, to $55 billion, according to a statement after the March 18-19
meeting.
The Fed also stopped linking the
benchmark interest rate with a specific level of unemployment, saying its
assessment of progress toward goals of maximum employment and 2 percent
inflation will take into account a wide range of information, including labor
market conditions.
Fed Chair Janet Yellen said in a news conference after the meeting that
“virtually all” measures of unemployment she studies are showing improvement.
Yellen has cited labor force participation, employment openings and the rate of
workers quitting their jobs among the gauges she’s watching.
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