There was a noticeable void in economic data in the first three days of the week, but now traders have something to chew on with a Thursday report from Washington showing that the number of Americans applying for first-time jobless benefits last week fell more than expected to hit a three-month low.
The Labor Department said in its weekly report that initial jobless claims, a proxy of weekly layoffs, slid by 9,000 to a seasonally adjusted 315,000 in the week ended March 8 from a revised 324,000 a week earlier (revised up from 323,000). Economists were pegging claims to come in at 331,000. Last week’s claims figure was the lowest since the week ended November 30, 2013, suggesting that the jobs market is stabilizing in March after some volatility in recent months.
The four-week moving average, regarded as a more reliable measure of labor trends because it irons out weekly volatility, declined by 6,250 to 330,500 from an upwardly revised 336,750 (from 336,500). That’s the lowest level since early in December. Economists generally consider average claims under 350,000 as a sign of modest growth in the jobs market. Claims are essentially trending now right where they were before the markets collapsed late in 2008.
Initial claims whipsawed around in the three months to March, with the unseasonably cold and snowy weather that swept across a wide swath of North America regularly cited as the reason for uneven applications for jobless benefits. Several Federal Reserve officials, including newly appointed Chairwoman Janet Yellen, said that they were monitoring the economic reports as part of their decisions on further tapering of QE3, but felt that weather was playing a significant role in soft readings on jobs. This latest report will provide ammo for the Fed to continue to put the brakes its monthly asset purchases to stimulate the economy that have been scaled back from $85 billion per month to now $65 billion per month. The Fed’s next policy meeting is scheduled for next Tuesday and Wednesday.
Continuing claims, or the number of people that are already collecting jobless benefits through state programs, declined by 48,000 to 2.855 million in the week ended March 1. Continuing claims are delivered at a one-week lag to initial claims.
Total claims, the count of people receiving benefits across all state and federal programs, increased by 12,282 to 3.45 million in the week ended February 22. Total claims come at a two-week lag to initial claims. At the same time in 2013, total claims equaled 5.62 million people.
The biggest increases in claims for the week ended March 1 were in New York (+18,709), Florida (1,940) and Illinois (+1,789). The largest decreases were in California (-5,765), Georgia (-5,437) and Massachusetts (-3,770).
Thursday’s report is encouraging, as companies seem willing to maintain staff and dovetails with an uptick in hiring in February. After sluggish growth in December and January, the U.S. added 175,000 jobs in February, exceeding economist expectations.
The markets are responding favorably to the morning report. Just minutes after the opening bell, the Dow Jones Industrial Average is ahead 41 points, the S&P 500 is up 5 points and the tech-rich Nasdaq has climbed 15 points.