WASHINGTON – Fewer people sought unemployment aid last week for the second week in a row, the latest evidence that hiring is likely solid.
Weekly applications for unemployment aid dropped 10,000 to a seasonally adjusted 268,000, the Labor Department said Thursday. The four-week average, a less volatile measure, increased to 278,500.
The figures, along with other recent data, suggest the economy is picking up a bit after barely expanding in the first three months of the year. Applications are a proxy for layoffs, so last week’s decline is a sign that companies are confident enough to hold onto their workers. When layoffs are low, hiring is typically steady.
Applications have been below 300,000, a historically low level, for 64 weeks, the longest such streak since 1973.
About 2.16 million people are receiving benefits, 3.1 per cent lower than a year ago.
The U.S. economy expanded at just a 0.5 per cent annual rate in the first quarter, after tepid growth of 1.4 per cent in the final three months of last year.
In the past two weeks, however, several reports have suggested growth will rebound in the April-June quarter to nearly 2.5 per cent, some economists forecast.
Sales at retail stores and restaurants jumped in April, evidence that Americans were willing to spend robustly after several months of caution.
And the housing market has perked up: Sales of existing homes rose last month, while sales of new homes soared to the highest level since 2008. Steady hiring and low mortgage rates have encouraged more Americans to take the plunge and buy a home. Housing construction also increased in April.
The improving economy, if sustained, could encourage the Federal Reserve to raise the short-term interest rate it controls for only the second time in nine years, perhaps as early as its next meeting in June or the following one in July.