Fewer Americans than projected filed applications for unemployment benefits last week, a sign that the job market is sustaining recent gains.
Jobless claims decreased by 23,000 to 340,000 in the week ended May 18, Labor Department figures showed today in Washington. The median forecast of 50 economists surveyed by Bloomberg called for a drop to 345,000. No states were estimated and there was nothing unusual in the data, a Labor Department spokesman said.
Falling dismissals could lay the groundwork for a hiring pickup should the economy be able to overcome the federal budget cuts that are projected to curb the expansion. Federal Reserve Chairman Ben S. Bernanke yesterday said the job market is still weak, one reason why policy makers will continue buying bonds in a bid to keep interest rates low and spur growth.
“We’re definitely moving in the right direction,” said Carl Riccadonna, a senior U.S. economist at Deutsche Bank Securities Inc. in New York, who correctly predicted the drop in applications. “If we can get back to 330,000 or lower, that’s going to be an early sign that the economy is accelerating into the second half of the year.”
Stock-index futures held earlier losses after the report as data showed Chinese manufacturing unexpectedly shrank and equity markets from Europe to Japan tumbled. The contract on the Standard & Poor’s 500 Index maturing in June fell 1 percent to 1,638.5 at 8:44 a.m. in New York.
Economists’ estimates in the Bloomberg survey ranged from 338,000 to 360,000. The Labor Department revised the previous week’s figure to 363,000 from an initially reported 360,000.