Applications for jobless benefits fall - if the estimates are right

Applications for U.S. unemployment benefits declined more than forecast last week, easing concern that employers will accelerate firings as the world’s largest economy cools.

Initial jobless claims dropped by 27,000 to 451,000 in the week ended Sept. 4, the lowest level in almost two months, Labor Department figures showed today in Washington. The total number of people receiving unemployment insurance was little changed, while those getting extended payments rose.

Job creation needs to pick up to prevent a slide in consumer spending, which accounts for 70 percent of the economy, and reduce the risk of a relapse into recession. The Federal Reserve said yesterday in its latest regional survey that the economy maintained its expansion while showing signs of a “deceleration” from mid-July through August.

“It’s still consistent with a pretty lackluster labor market,” said Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida, whose forecast of 460,000 initial claims was among the most accurate. “The good news is it’s coming down; the bad news is it’s still pretty high.”

Jobless benefits applications were projected to fall to 470,000 from a previously reported 472,000 for the prior week, according to the median forecast of 46 economists in a Bloomberg News survey. Estimates ranged from 460,000 to 482,000. The Labor Department revised the prior week’s figure to 478,000.

For the latest reporting week, nine states didn’t file claims data to the Labor Department in Washington because of the federal holiday earlier this week, a Labor Department official told reporters. As a result, California and Virginia estimated their figures and the U.S. government estimated the other seven, the official said.