Claims for jobless benefits fell to 357,000 last week, building up toward a solid March nonfarm payroll report that is scheduled to come out on Friday. Some economists though still fear the improvement in the U.S. economy seen so far this year could be just another false start.
In the week ended March 31, applications for unemployment insurance payments declined by 6,000 from the previous week's upwardly revised figure of 363,000, to 357,000, according to data from the Labor Department issued Thursday in Washington. That's the lowest level since April 2008, but missed the 355,000 claims economists polled by Reuters had forecast
The four-week moving average, considered a better measure of labor market trends because it smooths out weekly fluctuations, was 361,750, a decrease of 4,250 from the previous week's upwardly revised average of 366,000 for first-time benefit applicants.
Job gains are of great importance because they lead to income growth and that supports consumer spending, which accounts for more than 70 percent of U.S. economic growth.
The labor market recovery has become broader in terms of the number of industries contributing to the overall job growth, Ellen Zentner, an economist at Nomura Securities in New York, said before the report.
We expect to see a fourth consecutive month of better than 200,000 job growth, Zentner added.
The economy has added an average of nearly 250,000 jobs over the past three months and the unemployment rate has tumbled from 10 percent to 8.3 percent in a little over two years.
Economists surveyed by Reuters ahead of Friday's monthly Labor Department report expect nonfarm payrolls climbed by 203,000 in March, while unemployment rate held at 8.3 percent for the third month.
The U.S. still has about 13 million people who are unemployed, against 142 million employed people, and 88 million who are out of the labor force, data from the Bureau of Labor Statistics showed.
The number of people filing for benefits after an initial week of aid decreased by 16,000, to 3.3 million in the week ended March 24.
The continuing claims figure doesn't include the number of Americans receiving extended benefits under federal programs.
The four-week moving average for the week ended March 24 fell 24,500, to 3.37 million from the preceding week's revised average of 3.39 million.
The March Federal Open Market Committee meeting minutes indicated less support among the policymakers for a near-term move toward further quantitative easing compared with the previous meeting in January.
At the March meeting, Fed officials viewed additional stimulus as necessary only if the economy lost momentum or if inflation remain below 2 percent over the medium term.
Some economists, however, cautioned that it might be far too soon to declare a victory on the U.S. economic recovery.
The economy has had a number of false starts over the past two and a half years in which it appeared that GDP growth was about to accelerate only to fall back below trend, HSBC Chief U.S. Economist Kevin Logan wrote in a note to client.
Logan thinks the false starts and the resultant tepid pace of average growth have kept the unemployment rate much higher than Fed policymakers think is appropriate.
To guard against another slowdown and to give the expansion some staying power, we expect that the FOMC will choose to pursue further accommodative measures once Operation Twist comes to an end, Logan said.
Operation Twist is a Fed program of buying long-dated Treasurys in an attempt to push down long-term interest rates without expanding the central bank's balance sheet.
Stock index futures fell Thursday. S&P 500 futures slid 7.2 points and Dow Jones Industrial average futures gave back 59 points.