Unemployment benefit claims drop

Labor market continues to show signs of improvement despite economy’s slow start

WaSHINGTON — Fewer workers filed applications for unemployment benefits last week, signaling the U.S. job market remains firm even after growth plunged at the start of the year.

Jobless claims decreased by 8,000 to 276,000 in the week ended May 30 from a revised 284,000 in the prior period, a Labor Department report showed on Thursday. The median forecast of 52 economists surveyed by Bloomberg News called for 278,000. The total number of people receiving unemployment insurance payments was the smallest in more than 14 years.

Firings that have remained subdued mean employers could consider adding to staff as the economy emerges from a first-quarter slump. Job figures released today by the Labor Department are set to show steady gains in hiring that should allow Federal Reserve officials to maintain confidence that labor market progress is on track.

“This suggests businesses really did look through the weakness in the first quarter,” said Ryan Sweet, a senior econ- omist at Moody’s Analytics in West Chester, Pa., whose projection for 275,000 claims was among the closest in the Bloomberg survey. “The job market continues to do reasonably well.”

Estimates for jobless claims in the Bloomberg survey ranged from 270,000 to 300,000. The Labor Department revised the prior week’s reading from an initially reported 282,000.

It was the 13th consecutive week that the number of applications held under 300,000, which economists say is consistent with an improving labor market.

Other figures showed the labor force was less efficient last quarter. Worker productivity declined at a 3.1 percent annualized rate from January through March, revised down from a prior estimate of a 1.9 percent drop, according to another Labor Department report.

After a 2.1 percent decrease in the fourth quarter, it marked the biggest back-to-back declines since 1993.

That is making workers more expensive. Labor costs adjusted for productivity climbed at a 6.7 percent annualized rate in the first quarter, the report also showed. That followed a 5.6 percent increase from October through December, capping the biggest back-to-back gains since the six months ended in March 2007.

The four-week average of applications, a less-volatile measure than the weekly figure, increased to 274,750 from 272,000 in the prior week.

The number of people continuing to receive jobless benefits declined by 30,000 to 2.2 million in the week ended May 23, the fewest since November 2000. The unemployment rate among people eligible for benefits fell to 1.6 percent from 1.7 percent. These data are reported with a one-week lag.

Although the persistently low levels of firings are typically associated with a healthy pace of hiring, bigger job gains have been slow to develop in the second quarter.

Employers added 223,000 jobs in April after 85,000 the prior month that was the lowest since June 2012. They’ve averaged 193,750 this year after a 259,670 tally in 2014 that was the best performance in 15 years.

Payrolls probably advanced by another 226,000 in May, according to the median in a Bloomberg News survey of economists ahead of today’s report.