WASHINGTON – The number of people seeking U.S. jobless aid fell sharply last week, partially reversing two weeks of big gains that had raised concerns about rising layoffs.
Weekly applications for unemployment aid dropped 16,000 to 278,000, the Labor Department said Thursday. That followed a jump to 294,000 in the previous week, which was the highest level since February 2015. The four-week average, a less volatile measure, rose to 275,500.
Applications, which are a proxy for layoffs, have been below 300,000, a historically low level, for 63 straight weeks. That’s the longest such streak since 1973, when the nation’s population was smaller. That suggests companies are confident in the economy and willing to hold onto their staffs. Hiring is also typically solid when applications are so low.
Even with tepid economic growth, hiring has mostly been solid this year. The economy expanded just 0.5 per cent at an annual rate from January through March, after growing only 1.4 per cent at the end of last year.
Employers added 160,000 jobs in April, the fewest since September and below an average of about 240,000 in the previous 12 months. Still, job gains at that level are sufficient to keep the unemployment rate falling over time. The rate stayed at 5 per cent last month.
There are signs that the economy is rebounding after its soft patch, which is likely to propel further job gains. Home construction and manufacturing output rose modestly. And retail sales increased at a healthy clip last month, evidence that steady hiring is encouraging more spending.
A rebound in growth could make it more likely that the Federal Reserve will increase the short-term interest rate it controls as soon as its next meeting in June. According to records from its April meeting, Fed officials will consider boosting the rate for only the second time in nine years at that meeting if the economy keeps improving.