WASHINGTON – The number of people seeking unemployment aid was unchanged last week, a sign that most businesses are reluctant to cut jobs.
The Labor Department said Thursday that weekly applications for jobless benefits remained at a seasonally adjusted 276,000, the same as the previous week. The four-week average, a less volatile measure, rose 5,000 to 267,750.
Applications are a proxy for layoffs. Just three weeks ago, the average dropped to its lowest level since December 1973. That suggests employers are confident the economy will continue to expand and see little reason to let go of their staffs.
After stumbling in the July-September quarter under the weight of slowing overseas growth and a strong dollar, the U.S. economy is forecast to rebound in the final three months of this year. Americans are still spending on autos, electronics, and restaurant meals at a healthy rate, supporting a pickup in hiring last month.
Hiring is typically healthy when applications are so low. Employers added 271,000 jobs in October, the government said last week, the largest monthly gain this year. The unemployment rate ticked down to 5 per cent from 5.1 per cent, a fresh seven-year low.
There have also been signs that average pay is finally picking up after roughly six years of sluggish growth. Average hourly wages rose 2.5 per cent in October from a year earlier, the largest annual gain since 2009.
Still, that remains below the 3.5 per cent pace that is typical in a healthy economy.
October’s job gain came after two months of tepid hiring in August and September. Still, employers have added an average of 206,000 jobs a month this year. That’s enough to lower the unemployment rate over time.
The number of people receiving benefits edged up slightly to 2.17 million, from 2.16 million in the previous week.
The strong dollar, weak growth overseas and an excess of stockpiles in company warehouses have weighed on the economy since August. U.S. factory output has also fallen as oil and gas drilling companies have sharply reduced their spending on machinery and equipment.
Growth slowed to an annual rate of just 1.5 per cent, down from 2.3 per cent pace in the first half of the year. But many economists forecast that growth will rebound to a roughly 2.5 per cent pace in the final three months of this year.