Applications for unemployment aid fall to 49-year low
Washington – The number of people seeking jobless benefits dropped last week to the lowest level since November 1969, a sign the job market remains strong despite the partial government shutdown, now in its fifth week.
The Labor Department said Thursday that weekly applications for unemployment aid declined 13,000 to a seasonally adjusted 199,000. The four-week average, a less volatile figure, dropped 5,500 to 215,000.
The tally of furloughed federal employees requesting unemployment aid jumped to 25,419, more than double the previous week. Those figures are tracked in a separate category and aren’t included in the overall figures.
Weekly applications for jobless aid are a proxy for layoffs. The data suggests employers are confident enough about the economy to hold onto their workers. The unemployment claims data is one of the few economic reports still being released by the government because the Labor Department was funded before the shutdown and is still open.
Many companies are desperate for workers to respond to solid customer demand, which makes them reluctant to cut staff, even if something like the shutdown disturbs their business.
Most economists forecast that the shutdown will weigh on the economy in the first three months of the year. Depending on when it ends, growth could slow to a 1.5 percent to 2 percent annual pace in the first quarter, down from 3.4 percent in the final three months of last year.
If it lasts through March, growth could even fall to zero, Kevin Hassett, the chairman of the White House’s Council of Economic Advisers, acknowledged Wednesday on CNN. Some private-sector economists agree.
Last month, employers engaged in a burst of hiring, adding 312,000 jobs, while the unemployment rate rose to 3.9 percent from 3.7 percent. But that increase mostly reflected a positive trend – a surge of Americans coming off the sidelines to look for work. Not all immediately found jobs, which lifted the number of unemployed.