Dip in U.S. unemployment benefit applications signals weak hiring
Published Thursday, September 20, 2012 9:11AM EDT
WASHINGTON -- The number of Americans seeking unemployment benefits fell only slightly last week to a seasonally adjusted 382,000. The level suggests hiring remains weak.
The Labor Department said Thursday that applications declined by 3,000 from the previous week, which was revised up. The four-week average, a less volatile measure, rose for the fifth straight week to 377,750, the highest level in nearly three months.
Applications were skewed higher two weeks ago by the fallout from Hurricane Isaac. A Labor Department spokesman said there were no special factors last week.
Weekly applications are a measure of the pace of layoffs. When they consistently top 375,000, it typically suggests hiring is too weak to lower the unemployment rate.
Employers added only 96,000 jobs last month, below the 141,000 in July and much lower than the average 226,000 added in the first three months of the year. Recent job gains are barely enough to keep up with the growth of the working age population and aren't enough to rapidly drive down unemployment.
The unemployment rate dropped in August to 8.1 per cent from 8.3 per cent, but only because the number of people working or looking for work fell.
A separate monthly report from the Labor Department earlier this month showed that layoffs were at the lowest level in July in the 11 years the government has tracked the data.
The economy isn't growing fast enough to support much more hiring. It grew at a tepid 1.7 per cent annual rate in the April-June quarter, down from 2 per cent in the January-March quarter and 4.1 per cent in the final three months of last year.
Growth isn't likely to get much better for the rest of this year. Economists expect it to grow at a roughly 2 per cent pace. That's typically too weak to create enough jobs to lower the unemployment rate.
High unemployment and sluggish growth prompted the Federal Reserve to announce several major steps to boost the economy last week. Chairman Ben Bernanke said the Fed will buy $40 billion of mortgage-backed securities a month until there is "substantial" improvement in the job market.
Bernanke said at a news conference that high unemployment is "a grave concern" that causes "enormous suffering."