WASHINGTON – Fewer Americans applied for jobless aid last week, the third straight drop in a sign that the job market remains healthy despite a recent slowdown in hiring.
Weekly applications for unemployment aid dipped 1,000 to a seasonally adjusted 267,000, the Labor Department said Thursday. The four-week average, a less volatile measure, fell to 276,750.
Applications are a proxy for layoffs, so the decline in jobless aid suggests that companies are confident enough to hold onto their workers. When layoffs are low, hiring is usually steady.
Employers added 160,000 jobs in April, a slowdown from prior monthly job growth that averaged more than 200,000. Economists say that the government jobs report being released Friday will show job growth in May at roughly the same pace as in April.
U.S. businesses added 173,000 jobs last month, lifted by strong gains in services industries, according to a private survey by payroll processor ADP. Applications have been below 300,000, a historically low level, for 65 weeks, the longest such streak since 1973.
The number of people collecting benefits has dropped 2.6 per cent over the past year to 2.17 million people.
Fewer requests for jobless aid indicate that many employers are relatively untroubled by the slower economic growth during the first three months of 2016 and expect a rebound as the year continues.
The U.S. economy expanded at a sluggish 0.8 per cent annual rate in the first quarter, downshifting from already weak growth of 1.4 per cent in the final three months of last year.
But several recent reports point to growth accelerating in the April-June quarter to nearly 2.5 per cent, according to economist forecasts.
Sales at retail stores and restaurants climbed in April, as consumers appear to be optimistic after several months of reluctance to spend.
The housing market also looks resilient. Sales of existing homes rose last month, while sales of new homes soared to the highest level since 2008.
An improving economy could lead the Federal Reserve to hike the short-term interest rate it controls for the second time in nine years, perhaps as early as its next meeting in June or the following one in July.