WASHINGTON – More Americans sought unemployment aid last week, but the number of applications was still at a low level that suggested hiring is healthy.
THE NUMBERS: Applications for unemployment benefits rose 14,000 to a seasonally adjusted 266,000, the Labor Department said Thursday. The four-week average, a less volatile measure, slipped 1,000 to 256,500.
The number of Americans receiving benefits ticked up 7,000 to 2.14 million. Still, that’s down nearly 6 per cent from a year ago.
THE TAKEAWAY: Weekly applications are a proxy for layoffs. They are at historically low levels that suggest businesses are confident enough about the future to hold onto their employees.
The number of people seeking aid has been below 300,000 for 73 straight weeks, the longest streak since 1973. When layoffs are low, hiring is typically solid.
Companies have tapped the brakes on hiring this spring, but are still adding enough new workers to lower the unemployment rate over time. Monthly job gains averaged 147,000 in the April-June quarter, down from 196,000 in the first three months of the year.
Hiring nearly came to a halt in May, when employers added just 11,000 jobs. That suggested employers were turning cautious after a slump in growth in the first quarter. But hiring roared back in June, when employers added 287,000 jobs, the most in eight months.
The unemployment rate rose to 4.9 per cent in June from 4.7 per cent, still a historically solid level.
KEY DRIVERS: After hitting a soft patch at the start of the year, the economy likely accelerated in the second quarter, buoyed by stronger consumer spending and solid gains in home sales and construction.
Economists expect that will boost growth in the April-June quarter to an annual rate of about 2.5 per cent, up from just 1.1 per cent in the first three months of the year.