WASHINGTON – The number of people applying for U.S. unemployment benefits rose last week after falling to a 14-year low the previous week. Despite the increase, weekly applications remain at historically low levels that suggest hiring is gaining steam.
Applications rose 17,000 last week to a seasonally adjusted 283,000, the Labor Department said Thursday. That is the sixth straight reading below 300,000. Applications have fallen 19 per cent in the past year.
The figures indicate that recent signs of slowing growth overseas and last week’s financial market volatility haven’t spooked employers. Most appear confident enough to hold onto their staffs.
“More encouraging news on the U.S. job front,” said Jennifer Lee, an economist at BMO Capital Markets. The report “shows that job creation continued to forge ahead in October.”
Applications are a proxy for layoffs. The four-week average, a less volatile measure, declined 3,000 to 281,000, the lowest in 14 years. As a percentage of the working population, applications are near their lowest levels since the early 1970s.
Fewer people are continuing to receive benefits as well. The number of unemployment aid recipients dropped 38,000 to 2.35 million in the week ended Oct. 11, according to the latest data available.
Joseph LaVorgna, an economist at Deutsche Bank, estimates that the current level of applications points to average monthly job gains of above 250,000.
U.S. businesses have already been hiring workers at a healthy pace. Employers have added an average of 227,000 jobs a month this year. That’s up from an average of 194,000 last year. The economy has gained 2.64 million jobs in the past 12 months, the best annual showing since April 2006. The unemployment rate has fallen to 5.9 per cent, a six-year low.
More hiring translates into more paychecks and more consumers able to spend, boosting economic growth.
Still, the job market is far from full health. More than 7 million people hold part-time jobs but would like full-time work, up from 4.6 million before the downturn. And there are still twice as many people unemployed for longer than six months as there were before the recession, even though that figure has steadily declined in the past three years.