WASHINGTON — Fewer Americans than forecast filed applications for unemployment benefits last week, dropping the average over the past month to the lowest in 15 years, indicating companies are holding on to workers.
Jobless claims increased by 3,000 to 265,000 in the week ended May 2, a Labor Department report showed Thursday in Washington. The median forecast of 47 economists surveyed by Bloomberg projected 278,000. The four-week average, a less- volatile measure, fell to 279,500, the least since May 2000.
The dearth of applications for unemployment benefits shows demand remains strong enough for employers to maintain staffing levels. A report Friday may answer the question of whether they also need to continue beefing up headcounts after the economy slowed in the first quarter.
“Claims at these types of levels would be consistent with a strong payroll number,” said Ray Stone, an economist at Stone &McCarthy Research Associates in Princeton, New Jersey, who correctly predicted the initial claims figure. Jobless claims “are the most timely indicator of labor-market conditions, so on the margin things look pretty good.”
Stone forecasts employment climbed by 300,000 in April.
Estimates in the Bloomberg survey of economists ranged from 260,000 to 295,000. The prior week’s claims were unrevised at 262,000, the lowest level since April 2000.
The number of people continuing to receive jobless benefits dropped by 28,000 to 2.23 million in the week ended April 25, the fewest since November 2000.
In that same period, the unemployment rate among people eligible for benefits held at 1.7 percent, where it’s been since mid-March, the report showed.
Initial jobless claims reflect weekly firings and typically decrease before job growth can accelerate. Many layoffs now reflect company- or industry-specific causes, such as cost- cutting or business restructuring.
Zoetis Inc., the animal-health drugmaker that was spun off from Pfizer Inc., will fire as many as 2,500 workers – about one-quarter of its workforce – after facing pressure from activist investor Bill Ackman to trim costs.
The Florham Park, New Jersey-based company will close or sell 10 manufacturing sites and will reduce its geographical divisions from four to two, among other measures, in an effort to cut $300 million in annual costs by 2017, the company said Tuesday in a statement.
Federal Reserve Chairwoman Janet Yellen and her colleagues are keeping an eye on the labor market as they consider the appropriate time to raise their benchmark interest rate from near zero.
The Labor Department’s April employment report, due Friday at 8:30 a.m., is projected to show payrolls grew by 230,000 last month, and the unemployment rate probably fell to 5.4 percent from 5.5 percent in March, according to the Bloomberg survey median.
April’s payroll growth would follow an increase of 126,000 in March that was the weakest increase in over a year. Average hourly earnings, which typically rise faster as the labor market tightens, are projected to increase 2.3 percent in April from the year before, which would be the biggest gain since August 2013.
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