WASHINGTON – Fewer people applied for U.S. unemployment benefits last week, a sign that the job market should continue to improve.
The Labor Department said Thursday that weekly applications fell 10,000 to a seasonally adjusted 278,000. The four-week average, a less volatile measure, declined 2,250 to 279,000, the lowest level in more than 14 years.
Applications are a proxy for layoffs and have fallen 18.5 per cent in the past year. This suggests rising economic confidence among businesses, causing them to keep their workers and potentially look to hire more employees.
The decline in applications has overlapped with stronger hiring this year.
Employers have added an average of 227,000 jobs a month in 2014, up from an average of 194,000 last year. Over the past 12 months, employers have added 2.64 million jobs, the best showing since April 2006. The unemployment rate has fallen to 5.9 per cent, a six-year low.
Economists predict that the Friday jobs report will show that 230,000 jobs were added in October. The unemployment rate is projected to hold steady.
U.S. companies added 230,000 jobs in October, payroll processer ADP said Wednesday. The result was the0 highest in four months and a sign that businesses are still willing to hire despite signs of slowing growth overseas. Job gains above 200,000 are usually enough to lower the unemployment rate.
Still, the improvement in hiring has yet to translate into higher wages. Average wages have grown slightly faster than inflation. Median annual household income at $54,045 remains 4.6 per cent lower than incomes when the recession began in late 2007, according to Sentier Research.