Jobless claims in US increased less than forecast last week

[WASHINGTON] Fewer Americans than forecast filed applications for unemployment benefits last week, a sign that a steady labour market will bolster US growth.

Jobless claims rose by 3,000 to 267,000 in the week ended Sept 19, a report from the Labour Department showed on Thursday. The median forecast of economists surveyed by Bloomberg called for 272,000. The four-week moving average, a less-volatile measure of job cuts, dropped to the lowest level in more than a month.

Claims are hovering near historically low levels as employers retain workers to cater to sales growth. Rising demand for labour, including steady payrolls growth and more job openings, will help to sustain household spending, the biggest part of the economy.

"We're not seeing a whole lot of layoffs," said Scott Brown, chief economist at Raymond James Financial Inc in St Petersburg, Florida. "Claims have settled at a pretty low level. The labour market is definitely improving." Economists' estimates in the Bloomberg survey for weekly jobless claims ranged from 260,000 to 283,000. The four-week moving average decreased to 271,750 last week from 272,500.

The number of people continuing to receive jobless benefits was little changed at 2.24 million in the week ended Sept 12. The unemployment rate among people eligible for benefits held at 1.7 per cent. These data are reported with a one-week lag.

No states estimated data last week and there was nothing unusual in the data, the report showed. Initial jobless claims reflect weekly firings, and a sustained low level of applications has typically coincided with faster job gains. Many layoffs may also reflect company- or industry-specific causes, such as cost-cutting or business restructuring, rather than underlying labour market trends.

Groupon Inc plans to cut about 1,100 jobs and exit seven countries as part of a global restructuring that underscores the challenges the company faces in diversifying away from its origins as a daily deals site. The reductions represent about 10 per cent of the workforce for Chicago-based Groupon.

Below 300,000 Since early March, claims have been below the 300,000 level that economists say is typically consistent with an improving job market.

Federal Reserve policy makers this month decided to keep interest rates near zero, citing international headwinds, financial market turmoil and low inflation while noting the US was expanding at a moderate pace and the job market was making progress.

"The labour market continued to improve, with solid job gains and declining unemployment," central bankers said in a statement after the Sept 16-17 meeting.

BLOOMBERG