WASHINGTON (AP) — The number of Americans seeking unemployment aid fell last week to a seasonally adjusted 339,000, the second-lowest level in more than five years. The decline suggests hiring is improving from last month’s sluggish pace.
Applications for unemployment benefits dropped by 16,000, the Labor Department said Thursday. The four-week average declined 4,500 to 357,500.
Applications are a proxy for layoffs. A drop in layoffs signals that companies are cutting fewer jobs. Still, layoffs are only half of the equation. Businesses also need to be confident enough in the economic outlook to step up hiring.
In March, employers added only 88,000 jobs. That was a sharp drop from the previous four months, when hiring averaged 220,000 per month.
The unemployment rate fell to 7.6 percent from 7.7 percent, but the drop occurred because more people out of work stopped looking for jobs. The government doesn’t count people as unemployed unless they are actively looking for work.
Most economists expect hiring improved this month from March’s low level. Some economists expect net job gains increased to about 150,000.
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The economy is expected to have grown at a much quicker pace in the January-March quarter. Most economists forecast growth accelerated to an annual rate of more than 3 percent in the first quarter, up from just a 0.4 percent rate in the fourth quarter.
But many analysts now expect growth is slowing in the April-June quarter, mostly because across-the-board government spending cuts that began on March 1. That may have made businesses nervous about adding jobs.
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