More Americans filed claims for unemployment insurance payments last week as holiday closures prevented five states from completing a full count.
Applications for jobless benefits increased 10,000 to 354,000 in the week ended May 25, Labor Department figures showed today in Washington. Economists called for 340,000 claims, according to the median forecast in a Bloomberg survey. Two states, Virginia and Wyoming, provided their own estimates last week, and the Labor Department issued projections for Hawaii, Minnesota and Oregon, a government spokesman said.
Dismissals have been waning as employers hold on to workers to meet sales, helping to pave the way for a pickup in hiring once companies see demand accelerate. Faster gains in employment may cushion against an increase in the payroll tax and help household sustain spending, the biggest part of the economy.
“This week we had a bit of a pop, but we still are seeing a gradual improvement in the labor market,” said Bricklin Dwyer, an economist at BNP Paribas in New York. “The problem hasn’t really been from firing -- it’s been on the other side with a lack of hiring.” Economists at BNP Paribas projected claims would rise to 350,000.
Government offices were closed on May 27 for the Memorial Day holiday, which shortened the amount of time they had to process applications.
The economy expanded less than previously estimated in the first quarter as slower inventory building and cutbacks in government spending overshadowed the biggest gain in consumer purchases since the end of 2010, Commerce Department data showed today. Gross domestic product rose at a 2.4 percent annualized rate compared with the 2.5 percent pace initially reported.
Stock-index futures held earlier gains after the reports. The contract on the Standard & Poor’s 500 Index maturing in June rose 0.3 percent to 1,651.2 at 8:46 a.m. in New York.
Estimates for first-time claims ranged from 325,000 to 360,000 in the Bloomberg survey of 49 economists. The Labor Department revised the prior week’s applications to 344,000 from an initially reported 340,000.
The four-week moving average of claims, a less-volatile measure, climbed to 347,250 from 340,500.
The number of people continuing to collect jobless benefits rose by 63,000 to 2.99 million in the week ended May 18. 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 decreased by about 50,000 to 1.73 million in the week ended May 11.
The unemployment rate among people eligible for benefits held at 2.3 percent in the week ended May 18. Twenty-seven states and territories reported a decrease in claims, while 26 reported an increase.
Initial jobless claims reflect weekly firings and tend to fall as job growth -- measured by the monthly non-farm payrolls report -- accelerates.
Next week, the Labor Department will release the payrolls data for May. Economists currently project the report, due June 7, will show employers hired a net 165,000 workers, the same as in April. The jobless rate probably held at a four-year low of 7.5 percent.
Such progress isn’t great enough to convince central bank officials they should scale back the $85 billion monthly asset purchases they’ve undertaken to promote hiring. Federal Reserve Chairman Ben S. Bernanke told Congress last week that the bank would maintain its record stimulus until policy makers were more confident a sustainable recovery was in place.
“We’re not yet where we want to be,” Bernanke said during testimony to the Joint Economic Committee on May 22. “The job market remains weak overall. The unemployment rate is still well above its longer-run normal level, rates of long-term unemployment are historically high and the labor force participation rate has continued to move down.”
NetApp Inc. (NTAP:US), a Sunnyvale, California-based data-storage company, is adding to the lot of unemployed. It announced on May 21 that it would eliminate 900 positions.
That same day, Walt Disney Co.’s ESPN sports television division fired several hundred workers as part of a companywide drive to improve profitability. The firings numbered fewer than 400 and included unfilled positions.
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