Number of Americans filing new claims for jobless benefits decreasing
WASHINGTON (Reuters) — United States private employers stepped up hiring in June and the number of Americans filing new claims for jobless benefits last week fell by the most in two months, hopeful signs for the struggling labour market.
Employers outside government added 176,000 new workers to their payrolls last month, the ADP National Employment Report showed on Thursday, after increasing 136,000 in May. The government will release its closely watched employment report for June on Friday. While ADP has a poor track record of predicting non-farm payrolls, it was a welcome sign for the labour market. Initial claims for state unemployment benefits dropped 14,000 to a seasonally adjusted 374,000, the U.S. Labor Department said. The four-week moving average for new claims, a better measure of labour market trends, fell 1,500 to 385,750. "Jobless claims are a move in the right direction. The drop, combined with the ADP report earlier, suggests the jobs market is not as weak as recent data has suggested," said Omer Esiner, chief market analyst at Commonwealth Foreign Exchange in Washington. Non-farm payrolls are expected to have increased 90,000 in June, according to a Reuters survey, after May's 69,000 gain. The unemployment rate is seen steady at 8.2 per cent after rising in May for the first time since August. Job growth has weakened in recent months amid a cloud of uncertainty, spawned by the European debt crisis and fears of tax increases at home next year. The struggling labour market prompted the Federal Reserve last month to ease monetary policy further by extending a program to re-weight bonds it already holds toward longer maturities to hold down borrowing costs. "The Federal Reserve needs to see sustained improvement, like the claims moving back down toward 300,000 and a steady decline in the unemployment rate," said John Canally, an economist at LPL Financial in Boston. "If we get a couple of more bad jobs reports, (Fed policy-makers) will come in with more stimulus. Today's reports suggest they might hold off, but they will want to see more data before they decide." New applications for unemployment benefits remain in a tight range, and the four-week average is still elevated, suggesting any improvement in the jobs market will only be gradual. A Labor Department official said there was nothing unusual in the state-level data and only Alaska had been estimated. The number of people still receiving benefits under regular state programs after an initial week of aid climbed 4,000 to 3.31 million in the week ended June 23. The number of people on extended benefits fell 12,113 to 47,425 in the week ended June 16, the latest week for which data is available, as more states lost eligibility for extended benefits for the long-term unemployed. Now only four states offer extended benefits. The extended benefits data covered the week of the household survey from which the unemployment rate is drawn. Economists expect that as more people fall off the unemployment benefit rolls, the jobless rate will decline as people are forced to take up jobs they would not normally have considered or drop out of the labour force. A total of 5.87 million people were claiming unemployment benefits during the week ending June 16, under all programs, down 20,439 from the previous week.
