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(Updates with economist comment in fourth paragraph.)
Nov. 17 (Bloomberg) -- Fewer Americans than forecast filed first-time claims for unemployment insurance payments last week, an indication the labor market may be gaining traction.
Applications for jobless benefits decreased 5,000 in the week ended Nov. 12 to 388,000, the lowest level since April, Labor Department figures showed today in Washington. Economists forecast 395,000 claims, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls fell to a three-year low.
As firings diminish, U.S. companies may add to payrolls at a faster pace as demand picks up. Sales that grew more than expected in October set the stage for higher levels of output, which could require more employees.
“Layoffs have eased, which is a great sign,” said Omair Sharif, an economist at RBS Securities Inc. in Stamford, Connecticut. “The other side of the equation, however, is that firms are still very hesitant to hire. You’re getting a very gradual improvement in the labor market.”
Builders broke ground on more homes than forecast in October and construction permits climbed to the highest level since March 2010, signs that housing may become less of a laggard in the third year of the U.S. recovery, figures from the Commerce Department also showed today. Starts decreased 0.3 percent to a 628,000 annual rate from September’s 630,000 pace. Permits jumped 11 percent.
Stock-index futures trimmed earlier losses after the reports. The contract on the Standard & Poor’s 500 Index maturing in December fell 0.1 percent to 1,230.3 at 8:47 a.m. Treasury securities were little changed, with the yield on the benchmark 10-year note at 2.01 percent.
Claims estimates ranged from 382,000 to 405,000 in the Bloomberg survey of 44 economists. The Labor Department revised the prior week’s figure to 393,000 from an initially reported 390,000.
A Labor Department official today said there was nothing unusual in the state data last week. The seasonal adjustment process projected a drop in claims because of the holiday- shortened week, the official said, and the actual decrease was larger than the government estimated.
The four-week moving average, a less-volatile measure, dropped to 396,750 from 400,750.
The number of people continuing to collect jobless benefits decreased by 57,000 in the week ended Nov. 5 to 3.61 million, the fewest since September 2008. The continuing claims figure does not include the number of workers 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 70,400 to 3.46 million in the week ended Oct. 29.
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, was 2.9 percent in the period ended Nov. 5 for a fourth straight week, today’s report showed. Forty-seven states and territories reported an increase in unadjusted claims, while six had a decrease.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
While the unemployment rate slid to a six-month low of 9 percent in October, Federal Reserve officials are debating whether they must take additional measures to increase job opportunities for out-of-work Americans.
Earlier this week, San Francisco Fed President John Williams said more action “may be needed” to reduce “persistently high unemployment,” and Chicago Fed President Charles Evans promoted “increasing amounts of policy accommodation” to reduce unemployment that he said is far above the central bank’s objective.
Meanwhile, St. Louis Fed President James Bullard said the central bank’s policy is “appropriately calibrated” and should only be loosened if the economy deteriorates. Richard Fisher, president of the Dallas central bank, said Nov. 14 he sees decreasing odds the Fed will need to ease policy further amid signs the U.S. economy is “poised for growth.”
The holiday shopping season may provide brighter employment prospects in the final months of the year as the policy makers figure out how to address the economy.
See’s Candies Inc., a chocolate maker owned by Berkshire Hathaway Inc., will add an additional 5,500 employees to its usual staff of 1,500 to meet increased holiday production, according to Chief Executive Officer Brad Kinstler. Most of the news jobs, which are located primarily in the Western U.S., are temporary, Kinstler told Bloomberg Television on Nov. 11.
--With assistance from Chris Middleton in Washington. Editor: Carlos Torres
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