The easing of COVID-19 restrictions as cases of the omicron variant declined helped lead to a drop in initial jobless claims last week, sending them to the lowest level this year.
The Labor Department reported weekly unemployment claims fell 18,000 to 215,000, below economists’ forecasts. That was the fewest claims since the last week of December. The total number of those receiving jobless benefits in the week ending February 19 was unchanged at 1.48 million. However, the four-week moving average fell by 36,250 to 1.54 million. It hasn’t been that low since April 4, 1970.
Michigan (+3,500) was the only state where claims increased by more than 1,000 in the week ending February 19. Several automakers in that state temporarily shut factories last month after a Canadian trucker protest blocked shipments of parts needed to build vehicles.
Where Claims Declined the Most
Seven states had declines of more than 1,000 claims, led by Missouri (-6,949), New York (-3,037), Ohio (-2,212), and California (-2,182).
The claims data came ahead of tomorrow’s scheduled Labor Department release of the February nonfarm payroll report. Economists expect 400,000 jobs were created last month, with the unemployment rate declining to 3.9%.
Stock of the Day: Best Buy (BBY)
Shares of Best Buy are gaining after the electronics retailer said it expects a boost in long-term sales growth.
The company predicted that in the current fiscal year of 2023 revenue will be $49.3 billion to $53.8 billion, with earnings per share (EPS) of $8.85 to $9.15. Those were less than analysts’ estimates. However, it anticipates in fiscal year 2025, sales will jump to $53.5 billion to $56.5 billion, and enterprise non-GAAP operating income of $3.4 billion to $3.8 billion.
CFO Matt Bilunas explained the company is focusing this year on investing in the future. He added the results will be impacted by several factors, including spending on Best Buy’s new membership program, Totaltech, which the company believes will be a key driver of longer-term value, as well as comparisons to last year’s pandemic-driven high demand and government stimulus.
Omicron Impacts Q4 Sales
Best Buy also posted fiscal 2022 fourth quarter EPS of $2.73, in line with expectations. Revenue fell 3.3% to $16.4 billion, below forecasts. The company said its results were held down by supply-chain constraints that limited product availability, and the spread of the omicron variant of COVID-19, which limited store hours.
In addition, the company raised its quarterly dividend to $0.88 from $0.70, and announced plans to spend approximately $1.5 billion in share repurchases this year.
Shares of Best Buy had been in negative territory over the past year, but today’s 10% gain lifted them into the plus column for the first time since mid-January.