Applications for unemployment benefits dropped to 271,000 last week

WASHINGTON – Fewer Americans applied for unemployment claims last week, another sign of strength in the job market.

THE NUMBERS: Weekly applications for unemployment benefits fell 11,000 last week to a seasonally adjusted 271,000, the Labor Department said Thursday. The less volatile 4-week average was essentially unchanged at 271,000.

THE TAKEAWAY: The numbers show that most American workers are enjoying job security. The number of weekly claims for unemployment benefits amounts to a proxy for layoffs. And another Labor report shows that layoffs have dropped to well below where they were before the Great Recession of 2007-2009.

KEY DRIVERS: The U.S. job market is solid. Employers have been adding a healthy 210,000 jobs a month so far this year. And unemployment last month stayed at a seven-year low 5 per cent.

BIG PICTURE: Unemployment claims have remained near historic lows for the past nine months. Applications below 300,000 a week usually correspond with net monthly job gains of more than 200,000. The American economy is growing at a steady but unspectacular pace of about 2 per cent a year — enough to support consistent hiring. On Wednesday, the Federal Reserve decided the economy was healthy enough to withstand the first interest rate increase in years. Fed policymakers raised the short-term rate they control from near zero, where it had been since December 2008.