Jan. 23 (Bloomberg) — Applications for unemployment benefits held near a six-week low, showing firings remain muted following the holidays.
Jobless claims rose by 1,000 to 326,000 in the period ended Jan. 18, Labor Department data showed today in Washington. The median forecast of 50 economists surveyed by Bloomberg projected 330,000. Applications for one state and the District of Columbia were estimated and there were no other unusual circumstances, a Labor Department spokesman said as the data were released.
Rising optimism about the growth outlook in the world's largest economy is buoying business and consumer spending and keeping dismissals subdued. Further hiring gains and a pickup in wages following a smaller-than-projected gain in December payrolls that some blamed on bad weather would help households sustain demand in the first quarter.
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"It's reassuring," said William Cheney, chief economist at John Hancock Financial Services Inc. in Boston. "After the December jobs report everybody was pretty nervous. This is a number that makes it more likely December was a fluke."
Stock-index futures held earlier losses after the report. The contract on the Standard & Poor's 500 Index maturing in March dropped 0.3 percent to 1,833.3 at 8:40 a.m. in New York.
Estimates in the Bloomberg survey of economists ranged from 303,000 to 355,000. The prior week was revised to 325,000, the fewest since late November, from a previously reported 326,000.
Payroll survey
Last week presented the period surveyed by the Labor Department in calculating payroll data for January.
The four-week average of claims, a less-volatile measure than the weekly figure, declined to 331,500 from 335,250 in the prior week. Over the comparable survey week in December, the average was 343,750.
The number of people continuing to receive jobless benefits rose by 34,000 to 3.06 million in the week ended Jan. 11, the most since July.
Today's report was the first to show that about 1.35 million unemployed Americans lost emergency extended benefits after Congress allowed the program to expire at the end of 2013.
The extended benefits were last doled out in the week ended Dec. 28. The Senate on Jan. 14 failed to advance a Democratic plan to restore those benefits after a dispute over how to cover the cost of the benefits and how long they should continue — for three months or a year — stalled progress on the measure.
Emergency benefits
The federal program started in 2008 and at one point provided a total of as many as 99 weeks of benefits, including 26 weeks of standard state-funded benefits. At the end of 2013 the maximum was 73 weeks.
The unemployment rate among people eligible for benefits held at 2.3 percent in the week of Jan. 11, today's report also showed.
Thirty-nine states and territories reported an increase in claims, while 14 reported a decrease. These data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and typically wane before job growth can accelerate. Employers added fewer workers than expected in December, increasing payrolls by 74,000 for the smallest gain since January 2011 and less than the most pessimistic projection in a Bloomberg survey.
At the same time, job growth in 2013 averaged 182,170 per month, compared with the previous year's 182,750. Economists surveyed by Bloomberg Jan. 10-15 see payrolls rising by about 200,000 per month in 2014, compared with 196,000 in the previous tally of estimates conducted Dec. 6-11.
Fed's view
The outlook for further improvement in the economy and job market helps explain why Federal Reserve policy makers decided to begin reducing stimulus at their last meeting. The central bank on Dec. 18 trimmed monthly bond purchases starting this month to $75 billion from $85 billion.
Fed officials also raised their assessment of the outlook for the job market, predicting the unemployment rate will fall as low as 6.3 percent by the end of 2014, compared with a September projection of 6.4 percent to 6.8 percent.
The policy makers next meet Jan. 28-29 in Washington.
Companies that are upbeat about economic growth in 2014 might also help brighten employment prospects. Electronic equipment distributor Richardson Electronics Ltd, based in Lafox, Illinois, is counting on broad-based expansion to lift orders.
"We're seeing signs that global economic conditions are improving," Chief Executive Officer Edward Richardson said on a Jan. 9 earnings call. "We're also seeing growth in several key markets," including automobiles, textiles and wood, which in turn generate more demand for their products, he said.
With assistance from Chris Middleton in Washington.
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