US Unemployment Aid Applications Tick Up to 371K
Weekly applications for U.S. unemployment benefits ticked up slightly last week, the latest sign of slow but consistent gains in the job market.
The Labor Department said Thursday that applications rose 4,000 to a seasonally adjusted 371,000, the most in five weeks. The previous week’s total was revised lower.
The four-week average, a less volatile measure, increased 6,750 to 365,750, after falling to a four-year low the previous week.
A department spokesman says all states reported data and none were estimated. In the previous two weeks, the department relied heavily on estimates because many states weren’t able to report data over the holidays.
The figures "continue to suggest steady but modest U.S. employment gains," Robert Kavcic, senior economist at BMO Capital Markets, said in a note to clients. "That said, claims stubbornly refuse to break below the ... range that has been in place for the past year."
Weekly applications are a proxy for layoffs. They have fluctuated for most of the past 12 months between 360,000 and 390,000. At the same time, job growth has been stable.
Employers added 155,000 jobs in December, the department said last week, while the unemployment rate remained 7.8 percent. The gain in hiring nearly matched the average of 153,000 jobs per month in 2011 and 2012. That’s just been enough to slowly push down the unemployment rate, which fell 0.7 percentage points in 2012.
December’s steady job gain suggests employers didn’t cut back on hiring in the midst of the debate over the tax and spending changes known as the fiscal cliff. Many economists feared that the prospect of higher taxes and steep cuts in federal spending would cause a slowdown in job gains.
That’s a good sign, since more budget showdowns are expected. Congress must vote to raise the government’s $16.4 trillion borrowing limit by around late February. If not, the government risks defaulting on its debt. Republicans will likely demand deep spending cuts as the price of raising the debt limit.
The number of people continuing to receive unemployment aid dropped to 5.36 million in the week ended Dec. 22, the most recent data available. That’s down about 50,000 from the previous week.
Still, hiring is too weak to rapidly reduce the number of unemployed, which stands at 12.2 million. That’s far higher than the 7.6 million who were out of work when the Great Recession began in December 2007.
There are signs the economy is improving. The once-battered housing market is recovering, which should lead to more construction jobs in the coming months. A gauge of U.S. service firms’ business activity expanded in December by the most in nearly a year. Auto sales for 2012 were the best in five years. And Americans spent more at the end of the crucial holiday shopping season.