Claims for Unemployment Benefits Take Unexpected Dive
American companies may be experiencing a rising confidence in outlook for demand as applications for unemployment benefits saw an unexpected decline during the week ending March 22. Applications reached an almost four-month low decreasing by 10,000 to 311,000. The median forecast by economists pegged the number at 323,000 unemployment claims. Additionally, the four-week average of applications filed with state agencies sank to its lowest level since September.
“It seems to be genuinely good news for the labor market,” said Guy Berger, a U.S. economist at RBS Securities Inc. “In all likelihood, employment growth in March is going to be stronger than what we’ve seen in the last three months, and this claims data is consistent with that.”
Figures from the U.S. Department of Commerce showed a U.S. economy expanding more quickly than estimated as the GDP increased at an annual 2.6 percent, revised upward from 2.4 percent. The increase in part reflects increased spending in health care.
The less volatile four-week average of claims fell to 311,750 from 327,000 the prior week, the lowest since September 28. The number of people receiving unemployment benefits fell by 53,000 to 2.82 million for the week ending March 15, the lowest since December 21. Thirty seven states and territories reported declines in claims while 18 reported claims increases.
In February, U.S. employers increased payrolls by 175,000 and hiring is estimated to rise to 190,000 in March, according to the U.S. Department of Labor. The median projection of economists for hiring in 2014 is 192,000 per month, compared to 194,250 in 2013 and 186,330 in 2012.