The number of Americans filing initial claims for unemployment fell to 344,000 last week, a government report showed, as an accelerating economy prompts companies to retain workers. The number of applications for jobless benefits fell by 3,000 from a revised 347,000, the Labor Department said in Washington. The four-week moving average of claims, a less volatile measure, rose to 335,500 from 334,000, the lowest since November 2000.
Businesses have been holding onto workers to meet rising demand for goods and services, and higher profits give companies such as retailer Petsmart Inc. the means to add more employees. A survey of economists by the Federal Reserve Bank of Philadelphia showed payrolls will rise by an average 240,000 a month this quarter, up from 142,700 in the bank's previous survey. ``The labor market seems to be improving gradually,'' said Lynne Reaser, chief economist at Banc of America Capital Management in St. Louis, before the report. ``The economy is still quite solid, and job growth should follow.'' Economists had expected the number of claims to fall to 335,000 from the 345,000 initially reported, according to the median forecast in a Bloomberg News survey. Estimates ranged from 325,000 to 350,000.
So far this year, claims are averaging about 347,500 a week, compared with 415,500 for the same period a year earlier. The number of people continuing to collect state jobless benefits rose by 19,000 to 2.948 million in the week that ended May 15 from a revised 2.929 million a week earlier. The statistics are reported with a one-week lag to initial claims.
Continuing Claims
The four-week moving average for continuing claims fell to 2.938 million, the lowest since June 2001, from 2.952 million. The insured unemployment rate, which tends to move with the jobless rate, was unchanged at 2.3 percent in the week ended May 15. Twenty-four states and territories during that week reported a decrease in new claims, while 29 had an increase. The U.S. economy will expand at a 4.5 percent annual rate this quarter as companies add more workers, according to 32 economists polled by the Federal Reserve Bank of Philadelphia between April 29 and May 14. Expectations of economic growth for all of 2004 remained at 4.6 percent, the fastest in two decades. The U.S. economy grew at a 4.4 percent annual pace in the first quarter, faster than estimated last month, the Commerce Department said today. The U.S. added 288,000 jobs in April on top of 337,000 in March, the biggest two-month increase in four years, the Labor Department reported May 7. Manufacturers added 21,000 jobs in April and ended more than three years of losses in February. Rising profits may also give companies the money to add workers. Among 489 companies in the Standard & Poor's 500 Index that have reported quarterly earnings so far, 73 percent have published results that exceeded analysts' forecasts, based on surveys from Thomson Financial. That compares with about 63 percent in the year-earlier period.
Petsmart, CPRi
Philip Francis, chief executive of Phoenix-based Petsmart, said Thursday that the largest U.S. pet-supplies retailer may hire about 5,000 people this year as it opens more stores. Petsmart said first-quarter profit jumped 46 percent. Chicago-based CPRi, which provides temporary staffing and recruiting for companies including AT&T Corp. and General Motors Corp., has seen a jump in demand for its services in the past few months, said Sean Bisceglia, the company's chief executive. President George W. Bush said Saturday that 45 of the 50 states added new jobs in April, increases he described as further evidence that $1.7 trillion in tax cuts are helping to boost the U.S. economy.
At the same time, some companies are still cutting jobs to hold down costs and boost profit. Pizza Inn Inc., a chain of 400 franchised pizza restaurants, is cutting about 15 percent of its workforce to reduce costs, the Colony, Texas-based company said on Monday. Tecumseh Products Co., a maker of lawnmower engines and compressors, plans to consolidate operations and cut 380 jobs in Michigan and Missouri.
Consumer Confidence
A survey by the New York-based Conference Board this week showed that gains in consumer confidence are being restrained by a mixed outlook for employment and rising gasoline prices. The percentage of consumers who saw jobs as hard to get now increased to the highest since December, while the percentage that saw jobs as plentiful rose to the highest since July 2002. Chicago-based United Airlines, the world's second largest carrier, may consider laying off more workers because rising fuel prices, Chief Operating Officer Peter McDonald said on Monday. The company has no immediate plans to trim jobs, he said. Crude oil and gasoline prices in New York remain near record highs on concern that supply won't satisfy rising demand. The rise in energy costs has sparked concern among economists that consumers will slow their spending. For now, demand remains strong enough that forecasters at the National Association for Business Economics this week boosted their targets for economic growth and job creation this year. ///www.bloomberg.com