More Americans sought unemployment benefits last week, though the overall level remains low and points to a healthy job market.
Weekly applications increased 7,000 to a seasonally adjusted 282,000, the Labor Department said Thursday. The four-week average, a less volatile measure, rose 5,000 to 271,500. The average had fallen to a 15-year low two weeks ago.
Applications are a proxy for layoffs. They have remained below 300,000, a historically low number, for 12 weeks. That suggests Americans are experiencing solid job security. It also indicates that employers are confident enough in the economic outlook to hold onto their staffs.
“We continue to get signs that the labor market remains resilient,” Derek Lindsey, an economist at BNP Paribas, wrote in a note to clients. “The trend in claims, below the pre-recession trough for weeks now, remains in line with … our expectation for another solid (jobs) report next Friday.”
The total number of people receiving benefits increased 11,000 to 2.22 million. That figure has fallen 16 percent in the past year, and represents roughly one-quarter of the total number of unemployed. Many of those out of work have used up all their benefits. Others, such as recent college graduates looking for work, aren’t eligible for unemployment aid.
Thursday’s data indicates that the job market has remained healthy even as the economy has faltered. That’s an important sign that the slowdown hasn’t spooked employers and may be temporary.
On Friday, the government will issue an updated estimate of the economy’s performance in the first three months of the year. Economists forecast that it will show the economy actually shrank at a 0.8 percent annual rate, according to a survey by data provider FactSet. That’s even worse than its first estimate last month that it had grown just 0.2 percent. Both figures are far short of the 3.6 percent growth in the second half of last year.
The picture for the second quarter is mixed so far. Consumers spent cautiously in April, according to a report on retail and restaurant sales released earlier this month. Americans have not ramped up their spending so far this year as economists had predicted, despite strong job gains and gas prices that are about $1 a gallon cheaper than a year ago.
And sales of existing homes fell in April after picking up in March.
Yet builders broke ground on new homes in April at the fastest pace in seven years. And those homes are selling: new home sales jumped nearly 7 percent in April from the previous month, the government said earlier this week.
Businesses appear ready to spend more: A measure of business investment rose for the second straight month in April after a huge drop in February, the government said Tuesday.
Employers are also hiring at a steady pace. They added 223,000 jobs in April, lowering the unemployment rate to a seven-year low of 5.4 percent, from 5.5 percent. That suggests employers think they need to keep adding jobs to meet future demand for their goods and services.
Story by the Associated Press