WASHINGTON – The number of Americans applying for unemployment benefits has reached its lowest level in seven weeks, a sign that the U.S. economy and job market are steadily improving.
The Labor Department said Wednesday that applications for unemployment benefits dropped 9,000 last week to a seasonally adjusted 280,000.
The four-week average, a less volatile measure, declined 8,500 to 290,250. That average has plunged 16 per cent in the past 12 months.
“What we have seen in the data over the past few months looks favourable for the labour market,” said Daniel Silver, an economist at JPMorgan Chase.
Applications are a proxy for layoffs. The number of people seeking jobless benefits has been at historically low levels — below 300,000 — for 14 of the past 15 weeks. That indicates that companies are retaining their workers and potentially looking to hire with the expectation that economic growth will continue.
As applications for benefits have steadily dwindled, hiring has improved. Employers added 321,000 jobs in November, the most in nearly three years. The unemployment rate held steady at 5.8 per cent, down sharply from 7 per cent 12 months earlier.
In the first 11 months of this year, employers have added 2.65 million jobs. That already makes 2014 the best year for hiring since 1999.
But wage growth remains sluggish. Average pay has risen just 2.1 per cent over the past 12 months, only slightly better than inflation.