Fewer Americans Filed for Jobless Benefits in Past Month

By Shobhana Chandra  

Photographer: Andrew Harrer/Bloomberg

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• U.S. Economy Grows 3.5%; Jobless Claims Fall to 281,000

Fewer Americans filed applications for unemployment benefits over the past month than at any time in more than 14 years, a sign the strengthening U.S. economy is buoying the labor market.
The four-week average of jobless claims, a less-volatile measure than the weekly figure, fell to 281,000 in the period ended Oct. 25, the lowest since May 2000, from 281,250 the week before, a Labor Department report showed today in Washington. Compared with the prior week, applications for benefits rose by 3,000 to 287,000.
Rising demand is prompting employers to hold the line on dismissals, laying the ground for faster hiring and wage growth. Better employment prospects are lifting consumers’ moods, making it
more likely that households will increase spending.
“The claims story remains positive,” said Russell Price, senior economist at Ameriprise Financial Inc. in Detroit, and the third-best forecaster of claims in the past two years, according to data compiled by Bloomberg. “The need for labor continues to grow. That’s helping to increase income, and it gives the consumer the ability to spend.”
A separate report released by the Commerce Department today showed the economy expanded faster than forecast in the third quarter. Gross domestic product climbed 3.5 percent after a 4.6 percent increase in the second quarter. It marked the strongest six months of growth since the second half of 2003.

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Stock-index futures dropped after the reports, with the contract on the Standard & Poor’s 500 Index expiring in December declining 0.3 percent to 1,966.60 at 8:51 a.m. in New York.
No states estimated data last week and there was nothing unusual in the report, an agency spokesman said as the figures were released.
Economists’ estimates in the Bloomberg survey ranged from weekly claims of 273,000 to 300,000 after an initially reported 283,000 the previous week.
The number of people continuing to receive jobless benefits rose by 29,000 to 2.38 million in the week ended Oct. 18. The unemployment rate among people eligible for benefits held at 1.8 percent. Both pieces of data are reported with a one-week lag.
Initial jobless claims reflect weekly firings and typically wane before job growth can accelerate.