Claims for jobless benefits plunged last week, showing U.S. employers have little need to trim staff as demand improves.
Applications for unemployment insurance payments decreased by 27,000 to 341,000 in the week ended Feb. 9, fewer than any of the 49 economists surveyed by Bloomberg projected, according to Labor Department data issued today in Washington. Another report showed consumer sentiment last week climbed to the highest level in a month.
A drop in firings will probably help workers feel more secure in their jobs, which, combined with a housing-market rebound and rising stock prices, may bolster consumer confidence and in turn spending. Sustained pickups in hiring and incomes would ensure that households have the means to overcome the burden of a higher payroll tax.
Source: Bloomberg. Read full article. (link)