Applications for U.S. unemployment aid plummet to 283K
Washington — The number of Americans seeking unemployment benefits fell sharply last week, a sign that a recent string of strong job gains may continue.
Weekly applications for unemployment aid dropped 21,000 last week to a seasonally adjusted 283,000, the Labor Department said Thursday. The four-week average of applications, a less volatile number, fell 6,500 to 289,750, its lowest level in 15 weeks.
Applications are a proxy for layoffs. They have been near or below 300,000 since September, a very low reading by historical standards that points to solid hiring. The average has dropped 16 percent in the past year.
The average is at its lowest level since late October. Jennifer Lee, an economist at BMO Capital Markets, said that before then, the average hadn’t been as low in more than 14 years.
“All in, this is an encouraging sign for February payrolls,” she said.
That decline has coincided with much stronger job gains. Employers added more than 1 million jobs from November through January, the strongest three-month pace in 17 years.
More than 3.2 million jobs have been created in the past year. That has helped lower the unemployment rate to 5.7 percent in January from 6.6 percent 12 months earlier.
The strong job gains are showing signs of finally starting to lift paychecks for more workers. Average hourly pay rose 0.5 percent in January, the most in six years, the Labor Department said earlier this month. While economists cautioned against reading too much into one month’s figure, it suggested employers may finally feel the need to raise wages to attract new workers and keep the ones they have.
Other reports also point to a strong job market. The number of available jobs posted by employers rose in December to a 14-year high, the government said last week.
The number of people quitting also picked up 2.1 percent from the previous month. More quits are a sign of confidence in the economy because people typically quit when they have another job lined up, usually at higher pay, or are optimistic that they can find a new position.
The number of people receiving benefits, meanwhile, rose to 2.4 million in the week ending February 7, the latest data available. That’s down from 2.9 million a year ago.