Applications for jobless benefits fell more than forecast last week, easing concern American employers are again slashing payrolls as the economy slows.
Claims dropped by 31,000, the first decline in a month, to 473,000 in the week ended Aug. 21, Labor Department figures showed today in Washington. The total number of people receiving government payments exceeded 10 million for the first time in four months, reflecting an increase in those getting extended benefits.
The average number of claims over the past month climbed to the highest level since November even as the latest reading provided some relief to the drumbeat of negative economic data in recent weeks. Employers have delayed hiring plans and some have renewed firings as the year-old recovery shows signs of petering out, raising the risk consumer spending will weaken further.
The trend "is consistent with a lackluster pace of job growth," said Scott Brown, chief economist at Raymond James & Associates Inc. "The private sector really hasn't recovered enough."
The median estimate of 48 economists surveyed by Bloomberg projected claims would drop to 490,000. Forecasts ranged from 475,000 to 510,000. The government revised the prior week's claims figure up to 504,000, the highest level in nine months, from a previously reported 500,000. The four-week moving average of claims increased to 486,750 from 483,500 the prior week.
The number of people continuing to collect unemployment benefits dropped by 62,000 to 4.46 million in the week ended Aug. 14 from 4.52 million the prior week.
The continuing claims figure does not include those receiving extended benefits under federal programs. The number of Americans who've used up traditional benefits and are now collecting emergency aid rose by about 268,000 to 5.86 million in the week ended Aug. 7. The figures reflect Labor Department revisions that were not included.
Combined with the continuing claims, the total receiving benefits rose to 10.1 million before seasonal adjustment, the most since mid April.
"The rate of firings is still elevated well above our comfort zone," said David Semmens, an economist at Standard Chartered Bank. The total number of people claiming unemployment benefits shows "an astronomical number of people to be inactive," he said. "This points to weak consumer spending and significant slack in the labor market for many months to come."
The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 3.5 percent in the week ended Aug. 14 from 3.6 percent.
While companies have boosted payrolls seven straight months, firings have remained high as the recovery shows signs of slowing. Private firms added 71,000 jobs in July, fewer than economists had forecast, according to government figures released Aug. 6.
