Unemployment aid rises slightly
WASHINGTON – The number of people seeking U.S. unemployment benefits basically held steady last week, as the job market continues to outpace broader economic growth.
The Labor Department said Thursday weekly applications for unemployment aid rose slightly by 1,000 to a seasonally adjusted 291,000. Jobless claims was subdued for the past two weeks after winter storms caused them to spike at the end of February because of closed schools and construction sites.
The four-week average, a less volatile measure, increased 2,250 to 304,750. That average dropped 7.5 percent over the past year.
Applications are a proxy for layoffs. When employers keep their workers, it is generally a sign they expect continued economic growth and will likely increase hiring. Applications below 300,000 are typically consistent with healthy job gains.
The relatively modest number of applications contrast with the Federal Reserve’s view announced Wednesday economic growth lost some momentum since the start of 2015.
“These data appear to defy” the Fed’s statement, said Ian Shepherdson, chief economist at Pantheon Macroeconomics. “So far, though, we see no sign of slower hiring either.”
The historically low level of benefit applications were matched by a surge in hiring. Employers added an average of 288,000 jobs a month since December, including a net new 295,000 jobs in February. The gains cut the unemployment rate to 5.5 percent from 6.7 percent a year ago.
Despite the job growth, other parts of the economy stumbled during February’s harsh snowstorms. Retail sales, housing starts and factory output each dropped last month, a sign of either a temporary setback because of unseasonably cold weather or evidence the additional paychecks generated by the recent hiring did little to improve consumer spending.
Average hourly wages climbed just 2 percent over the past 12 months, a sluggish pace that left inflation-adjusted household incomes lower now than they were before the start of the Great Recession in late 2007.
The Atlanta branch of the Federal Reserve forecasts the economy grew at an anemic annualized pace of just 0.3 percent during the first three months of this year, a severe slowdown from 2.2 percent in the fourth quarter of 2014 and growth averaging nearly 5 percent in the middle of last year.