Applications for Unemployment Benefits Drop
WASHINGTON (AP) – The number of people seeking U.S. unemployment benefits fell a slight 3,000 last week to a seasonally adjusted 336,000, a sign that layoffs remain low.
The Labor Department said Thursday that the four-week average of applications, a less volatile measure, rose slightly to a seasonally adjusted 338,500.
The average is roughly in line with pre-recession levels and indicates that companies are cutting few jobs. Applications are a rough proxy for layoffs.
The number of applicants has stabilized in recent weeks despite modest levels of hiring in January and February. When applications for unemployment benefits remain fairly steady from week to week, it suggests that businesses are confident that customer demand will be strong enough to justify retaining their workers.
A total of 3.53 million Americans received benefits as of Feb. 1 – the latest period for which figures are available – up from 3.52 million the previous week.
In recent months, snowstorms and frigid weather have contributed to a slowdown in hiring, retail sales and home construction. A scant 113,000 jobs were added in January. That follows the addition of just 75,000 jobs in December. Job growth for the past two months is only about half the monthly average for the previous two years.
Some positive signs did emerge in January’s jobs report. The unemployment rate reached a five-year low of 6.6 percent. The decline from 6.7 percent occurred because more of those out of work found jobs. It was an improvement from December, when the rate fell mainly because many of the unemployed stopped searching for work. The government counts people as unemployed only if they are actively looking for a job.
Builders broke ground on new homes last month at a seasonally adjusted annual rate of 880,000, down 16 percent from December, the Commerce Department said Wednesday. And retail sales plunged a seasonally adjusted 0.4 percent last month, the second straight monthly decline.
Most analysts think the economy will grow roughly 3 percent this year, which would be the strongest expansion since 2005.
But the severe winter weather has caused many analysts to revise down their forecasts for the current January-March quarter. Macroeconomic Advisers last week reduced its quarterly growth estimate to a 1.7 percent annual rate from an earlier forecast of 1.9 percent. Moody’s Analytics cut its forecast to a 1.9 percent annual rate from 2.2 percent.