WASHINGTON – Slightly fewer Americans sought unemployment benefits last week, pushing the average number of applications in the past month to an eight-year low.
The Labor Department said Thursday that weekly applications fell 1,000 to a seasonally adjusted 287,000 in the week ended Oct. 4. That is the fourth straight week that applications have been below 300,000, a clear sign of a job market on the mend.
Applications are a proxy for layoffs. They have fallen 9 per cent in the past month. That suggests employers are keeping their workers, likely because they expect continued economic growth and may be contemplating more hires.
“With the pace of firings exceptionally low, and surveys signalling robust hiring, we have to expect very strong payroll growth” in the next several months, Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a note to clients.
The four-week average of applications, a less volatile measure, dropped 7,250 to 287,750, the lowest level since February 2006, nearly two years before the Great Recession began.
The decline in applications has corresponded with robust hiring. Employers added 248,000 jobs last month, and hiring in the previous two months was healthier than previously believed, the government said last week. That helped push the unemployment rate down to 5.9 per cent, a six-year low.
The number of people receiving benefits has also fallen steadily to just 2.38 million in the week ended Sept. 27, the latest data available. That is the fewest since May 2006. Many former recipients have gotten jobs. But another key reason for the drop is that many of the long-term unemployed are no longer eligible. Jobless aid lasts for 26 weeks in most states.
The number of available jobs soared to a 13-year high in August, according to a separate government report Tuesday. That suggests employers will keep adding jobs at a healthy clip in the coming months.
Still, companies have been wary about filling positions, frustrating many job-seekers. Some employers say they can’t find workers with the right skills. Many economists, however, say that firms may not be offering high enough pay to attract qualified applicants.
The job market continues to bear scars from the recession. More than 7 million people hold part-time jobs but want full-time work, up from 4.6 million before the downturn. And there are still twice as many people unemployed for longer than six months as there were before the recession, even though that figure has steadily declined in the past three years.