WASHINGTON – The number of Americans seeking unemployment benefits fell last week to the lowest level in two months, suggesting employers remain confident enough in the economy to hold onto their workers.
The Labor Department said Thursday that weekly applications for unemployment aid dropped 11,000 to a seasonally adjusted 264,000. That’s the lowest level since July, when applications plunged to a 41-year low.
Applications are a proxy for layoffs, so the decline indicates that employers are cutting fewer jobs. Americans are enjoying strong job security: Applications have been below 300,000 for the past six months, which hasn’t happened since 1973.
Employers have also been hiring at a solid pace, adding an average of 243,000 a month in the past 12 months. That has brought the unemployment rate down to 5.1 per cent, a seven-year low.
The health of the job market will play a crucial role in the Federal Reserve’s deliberations Thursday as it wraps up a two-day meeting. Fed policymakers may decide to raise the short-term interest rate they control for the first time in nine years.
Some economists argue the job market has largely recovered from the Great Recession and can now withstand higher interest rates. But even so, many expect that other considerations, such as inflation that is stubbornly below the Fed’s target of a 2 per cent annual rate, may cause the Fed to hold off.
Not all economists agree that hiring has fully recovered from the downturn. The number of people working part time but who would prefer full-time work is far higher than it was when the recession began in December 2007. And the percentage of Americans working or looking for work has fallen sharply since then.
The number of people receiving benefits fell 26,000 to 2.24 million, the government said. That figure has declined 8.8 per cent in the past year. Many former recipients have gotten jobs, but some have used up all the benefits available to them.