Jobless Claims Allay Concern on U.S. Job Market: Economy

Claims for unemployment benefits declined last week to the lowest level in a month, easing concern that the U.S. labor market is faltering. First-time claims dropped by 1,000 to 367,000 in the period ended May 5, the Labor Department said today in Washington. Other reports showed that a gauge of consumer confidence declined to a three-month low, and the trade deficit widened on rising demand for imports from oil to autos. Claims are returning to levels reached in February and March, indicating a surge last month probably reflected difficulty in adjusting the data for an Easter holiday that came earlier this year than last. Declines in dismissals point to a brighter labor market that would help sustain consumer spending after payroll growth slowed last month. “The health of the labor market is improving,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh. Hoffman is the most accurate forecaster of payrolls in the two years ended in March, according to Bloomberg data. “It gives me a little bit of encouragement that the May employment report won’t be a third-strike-you’re-out type of number.” Stocks rose as Greece attempted to form a new government to try and remain in the euro area. The Standard & Poor’s 500 Index climbed 0.3 percent to 1,357.99 at the close in New York. The median forecast of 47 economists surveyed by Bloomberg News called for 368,000 applications last week. Estimates ranged from 345,000 to 380,000. The Labor Department revised the previous week from 365,000. Since February The latest week’s figure compares with an average of 373,000 claims since the end of February. Initial jobless claims reflect weekly firings and tend to fall as job growth --measured by the monthly non-farm payrolls report -- accelerates. American employers added fewer workers than forecast in April and the jobless rate unexpectedly fell as people left the labor force, the Labor Department said on May 4. Payrolls climbed 115,000, the smallest gain in six months, after a 154,000 March increase.