New applications for benefits fall 9,000 to 323,000
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — Fewer Americans applied for unemployment benefits last week, a sign that layoffs continue to dwindle in a gradually improving U.S. labor market.
Initial jobless claims in the last week of August fell by 9,000 to a seasonally adjusted 323,000, which was just a tick above a five-and-a-half year low, the Labor Department said Thursday.
Economists polled by MarketWatch had expected claims to total 330,000 in the seven days ended Aug. 31.
The four-week average, a more reliable gauge than the volatile weekly number, dropped by 3,000 to 328,500 and touched the lowest level since October 2007 — two months before the Great Recession began.
Initial claims are a proxy for layoffs since most people are only eligible for benefits if they’ve just lost a job. Even if hiring isn’t increasing all that much, a declining number of layoffs is good for the economy because it means more people are working.
So far in 2013, the U.S. has been adding an average of 192,000 net jobs a month. That’s more than enough to keep up with the natural growth of the labor force, but it’s not fast enough to rapidly drive down the nation’s still-high 7.4% unemployment rate.
The latest monthly employment report, issued Friday, is projected to show an increase of 170,000 jobs in August. The unemployment rate is expected to remain at 7.4%.
Another employment report produced by large payrolls processor ADP showed a similar gain. ADP reported that the private sector added 176,000 jobs in August.
If hiring meets or exceeds Wall Street’s target, many economists think that will spur the Federal Reserve in September to begin to reduce a massive stimulus program designed to boost U.S. growth. The Fed has been buying billions of dollars in bonds each month to keep interest rates at ultra-low levels.
Meanwhile, the number of people already receiving benefits, known as continuing claims, declined by 43,000 to a seasonally adjusted 2.95 million in the week ended Aug. 24. Continuing claims reflect the number of people already receiving benefits.
Initial claims from two weeks ago, meanwhile, were revised up to 332,000 from an original reading of 331,000, based on more complete data collected at the state level.
Jeffry Bartash is a reporter for MarketWatch in Washington.
