The number of Americans seeking unemployment benefits dipped 2,000 last week to a seasonally adjusted 339,000, evidence that layoffs are low and hiring will likely remain steady.
The Labor Department said Thursday that the less volatile four-week average rose 8,500 to 357,250. The average was driven up in recent weeks by spikes that reflected seasonal volatility around the Thanksgiving and Christmas holidays. The government struggles to account for seasonal hiring by retailers and other businesses and for temporary layoffs of school employees during the holidays.
Applications are a proxy for layoffs. They appear to have stabilized near the pre-recession levels reached in the late summer and are at a level consistent with solid hiring.
The job market has picked up in recent months. Employers have added an average of 200,000 jobs a month from August through November. That's helped lower the unemployment rate to a five-year low of 7 percent.
There have been other signs the economy is improving. Americans are more confident and spending more. And orders to U.S. manufacturers jumped in November, evidence that businesses are spending more on factory-made items such as machinery, computers and electrical goods.
Not all the data have been positive: Income rose at a slower pace than spending last month. That means Americans saved less to spend more. And existing home sales have fallen for three straight months, held back by higher prices and mortgage rates.
Still, the economy expanded at a 4.1 percent annual rate in the July-September quarter, the best growth in nearly two years. The healthy gain largely reflected a jump in restocking. That's unlikely to be repeated in the current October-December quarter. But many economists have become more optimistic about the fourth quarter and expect growth will clock in at a solid 2.5 percent annual rate.
Nearly 4.5 million people received benefits in the week ending Dec. 14, the latest data available. That's 180,000 more than the previous week.
Nearly 1.4 million of those recipients are getting benefits under an emergency program put in place five years ago and paid for by the federal government.
The program provided up to 47 extra weeks of benefits. But it expired last week and will cut off benefits for about 1.3 million people, according to the National Employment Law Project, an advocacy group.
The impact probably won't show up in the data until mid-January, because the figures for total benefit recipients are released with a two-week lag.
Economists predict that the benefit cutoff will cause the unemployment rate to fall by as much as a quarter of percentage point in early 2014. But they worry that the drop will likely occur because many of the former recipients will give up on their job searches, which are required in order to receive benefits. The government counts people as unemployed only if they're actively seeking jobs
© Copyright 2024 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.