Fewer Americans than forecast filed applications for unemployment benefits last week, a sign persistent demand is fueling gains in the labor market. First-time jobless claims dropped 10,000 to a three-week low of 278,000 in the week ended Nov. 1, as reported by the U.S. Labor Department. The median forecast of 50 economists surveyed called for 285,000. The four-week moving average, a less-volatile measure of job cuts, reached the lowest level in more than 14 years.
Cutbacks in dismissals and increased hiring are sustaining household purchases, which account for 70 percent of the world’s largest economy. Wages that have been slow to pick up remain a headwind for bigger spending gains that would make it easier for the expansion to accelerate. The Labor Department’s measure of employee output per hour increased at 2 percent annualized rate, after a revised 2.9 percent pace in the prior three months. Labor costs rose 0.3 percent in the third quarter after a 0.5 percent annualized decline, the agency said.
The four-week average of claims declined to 279,000, the lowest since April 2000, from 281,250 in the prior period. The number of people continuing to receive benefits fell by 39,000 to 2.35 million in the week ended Oct. 25, the fewest since December 2000. The unemployment rate among people eligible for benefits held at 1.8 percent. Employers have added an average of more than 227,000 jobs a month so far this year while the unemployment rate is expected to hold at 5.9 percent, the lowest since July 2008.