Last week the total number of first-time claims for unemployment benefits rose, which has many economists worried about economic recovery. As they should be!
Applications for first-time unemployment benefits increased by 26,000 to 397,000 in the week ended March 5, Labor Department figures showed today. Economists forecast claims would climb to 376,000, according to the median estimate in a Bloomberg News survey. The total number of people receiving benefits in the prior week fell to the lowest since October 2008.
The rebound in the world’s largest economy has curbed firings, paving the way for employers such as Boeing Co. (BA) and Home Depot Inc. (HD) to add jobs and spur household spending. A Labor Department official said claims generally rise the week after a federal holiday and some New England states reported more claims due to school holidays.
“It’s the volatility around the Presidents’ Day holiday,” Jonathan Basile, director of U.S. economics at Credit Suisse Holdings USA Inc. in New York said before the report. “The swings around this moving holiday sometimes distort the trend. The labor market has been improving. Firms feel better about the outlook because their sales have improved and the need to cut costs” has decreased. The Presidents’ Day holiday was Feb. 21.