Applications for jobless benefits rise to 339K
WASHINGTON (AP) — The number of people seeking U.S. unemployment benefits rose 8,000 last week to 339,000, evidence that layoffs ticked up. Still, the increase wasn’t enough to suggest the job market is worsening.
The Labor Department said Thursday that the four week average of applications, a less volatile measure, increased 3,500 to a seasonally adjusted 336,750.
The average is roughly in line with pre-recession levels and suggests that, despite last week’s rise, companies are cutting few jobs. Applications are a proxy for layoffs.
Last week’s figure may also have been pushed up by cold weather, which can cause construction firms and other companies to stop work.
A total of 3.52 million Americans received benefits as of Jan. 25 — the latest data available — up from 3.47 million the previous week.
The data suggests the job market remains stable, despite weak hiring in the past two months. Tepid job gains in January and December have raised concerns that the economy has lost momentum this year.
Still, economists weren’t worried by last week’s increase in applications.
Jim O’Sullivan, an economist at High Frequency Economics, noted that the four-week average remains below last year’s average of 343,000. Monthly job gains, meanwhile, averaged 194,000 last year, far above December and January’s totals. That suggests hiring could rebound soon.
A sharp slowdown in growth and hiring is less likely as long as applications for unemployment benefits remain relatively low. Steady applications suggest businesses are confident enough in the economy to hold onto their workers.
Extremely cold weather discouraged shoppers in January and caused a 0.4 percent drop in retail sales, the Commerce Department said in a separate report. Sales in December were also revised lower. The data indicated that consumer spending has lost momentum after a strong finish last year.
Other recent economic data has been mixed. A survey of manufacturing firms found that factory expansion slowed in January, as a measure of new orders plummeted. A separate gauge of forthcoming home sales also fell.
But a survey of service companies, which covered retailers, construction contractors, and financial services firms, among others, found that growth accelerated last month.
Employers added just 113,000 jobs in January, a second straight weak showing after just 75,000 new jobs in December. Economists have partly blamed December’s figures on extremely cold weather.
There were some good signs in January’s report. The unemployment rate fell to a five-year low of 6.6 percent, from 6.7 percent. The decline occurred because more of those out of work found jobs. That was an improvement from December, when the rate fell because many of the unemployed stopped searching for work. The government only counts people as unemployed if they are actively looking.