WASHINGTON – More Americans sought unemployment benefits last week, but the number of applications continues to be at historically low levels that suggest solid economic growth will continue.
The Labor Department said Wednesday that applications for unemployment benefits climbed 17,000 last week to a seasonally adjusted 298,000.
The four-week average, a less volatile measure, rose 250 to 290,750. That average has plummeted 17.5 per cent in the past 12 months.
“The claims data still point to relatively upbeat conditions in the labour market,” said Daniel Silver, an economist at JPMorgan Chase, noting that there are routinely ups and downs in the weekly figures.
Applications are a proxy for layoffs. For almost four months, applications for jobless aid have hovered at relatively low sub-300,000 levels. That suggests that employers expect strong economic growth to continue, causing them to hold onto their staff and potentially hire additional workers.
As fewer people have sought unemployment benefits, job growth has steadily accelerated and helped fuel the economy.
The economy expanded at an annualized rate of 5 per cent during the July-September quarter, the strongest performance in 11 years. That follows a 4.6 per cent annual rate in the April-June quarter, the government reported last week.
Hiring has improved as layoffs have waned.
Employers added 321,000 jobs in November, bringing the total for the first 11 months of 2014 to 2.65 million new jobs. That already makes 2014 the best year for hiring since 1999.
The unemployment rate held steady at 5.8 per cent, down from 6.7 per cent at the start of the year.
The four-week moving average of jobless claims is consistent with monthly job gains of at least 250,000, said Joshua Shapiro, chief U.S. economist at the forecasting firm MFR
Still, wage growth has lagged hiring. Average wages increased only 2.1 per cent in the past 12 months. That means that incomes are only barely outpacing inflation, with core consumer prices — which excludes volatile energy and food costs — up 1.7 per cent over the past 12 months.