U.S. Jobless Claims Fall For 3rd Straight Week

job fair hiringWASHINGTON -- Fewer Americans sought unemployment aid last week, reducing the average number of weekly applications last month to a five-year low. The drop shows that fewer layoffs are strengthening the job market.

The Labor Department said Thursday that applications fell 10,000 to a seasonally adjusted 332,000. That reduced the four-week average to 346,750, the lowest since the week of March 8, 2008, three months after the Great Recession began.

The report "provides further evidence of a gradual strengthening in labor market conditions," Paul Dales, senior U.S. economist at Capital Economics, said in a note to clients.

Investors appeared to view the report as further evidence that job growth and the economy are strengthening. The Dow Jones industrial average rose 64 points in mid-day trading, and the Standard & Poor's 500 stock index neared its all-time high.

Applications for unemployment aid are a proxy for layoffs, and their steady decline signals that companies are laying off fewer and fewer workers. It suggests that companies aren't worried that business might fall off in the near future.

The number of applications for benefits has dropped five times in the past six weeks and has declined 13 percent since mid-November. At the same time, net hiring has picked up. Employers added an average of 200,000 jobs a month from November through February -- up from about 150,000 a month in the previous four months. And the unemployment rate reached a four-year low of 7.7 percent in February.

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During the Great Recession, layoffs spiked, and applications for unemployment benefits peaked at 667,000 in the week that ended March 28, 2009. In a healthy economy, applications usually fluctuate between 300,000 and 350,000.

Applications may pick up in coming weeks, though, as across-the-board government spending cuts force many federal agencies and government contractors to lay off or furlough workers. The spending cuts, which took effect March 1, were mandated by a 2011 budget deal. The White House and Congress haven't been able to reach a deal to reverse them.

Bricklin Dwyer, an economist at BNP Paribas, estimates that the government spending cuts will boost applications for unemployment aid by about 15,000 a week in the second half of March and between 15,000 and 20,000 a week in April.

Still, the economy should generate steady job gains this spring, Dwyer says, even if monthly job growth dips from February's 236,000 increase.

Jim O'Sullivan, chief U.S. economist at High Frequency Economics, says he thinks the Federal Reserve's efforts to boost growth by keeping interest rates at record lows should blunt the impact of the government spending cuts.

"What we have here is monetary stimulus vs. fiscal drag, and I think the Fed is winning," O'Sullivan says.

So far, employers haven't been laying off more workers because of higher taxes or government spending cuts.

In January, Social Security taxes rose 2 percentage points. Someone earning $50,000 has about $1,000 less to spend in 2013. A household with two high-paid workers has up to $4,500 less.

Higher taxes haven't prevented Americans from spending more. Retail sales jumped in February by the most in five months, the Commerce Department said Wednesday. Much of the increase reflected higher gas prices. But even excluding the volatile categories of gas, autos and building supply stores, so-called core retail sales rose strongly.

Economists were encouraged by the report. Many now expect much faster growth in the January-March quarter.

Strong auto sales and a healthy recovery in housing are spurring more hiring and economic growth. Builders started work on the most homes last year since 2008. New-home sales jumped 16 percent in January to the highest level since July 2008.

And home prices rose by the most in more than six years in the 12 months that ended in January, according to real estate data provider CoreLogic.

About 5.6 million people received unemployment aid in the week that ended Feb. 23, the latest period for which figures are available. That's about 220,000 more than the previous week. The total benefit rolls aren't seasonally adjusted and can be volatile.

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Charlie Mugler

The reason the number keeps dropping is due to the amount of people that have ran out of unemployement that can not file any more. That number increases each day. The number that is used is very messed up.

March 19 2013 at 11:41 AM Report abuse rate up rate down Reply
Kathy

We also know this is total B/S. The rates are not dropping they are going higher and will continue to go higher until this jerkwad is out of office. You will also see a huge drop in the military employment thanks to this administration. Destroy our military while you give entitlements to the folks who refuse to get up off their butts and work. Weaken our defense while those who are LAZY get all the benefits. BRILLIANT MOVE MR. JOKE OF A PRESIDENT. STUPID STUPID Some folks just NEVER learn

March 19 2013 at 9:42 AM Report abuse rate up rate down Reply
Curt's Stuff

What's Jack Welch saying about this?

March 14 2013 at 12:00 PM Report abuse rate up rate down Reply
exnyorker

how amusing that the same type of figures while George W Bush was president were applauded by the same people bemoaning President Obama's administration. It just seems to hypocritical.

March 14 2013 at 11:52 AM Report abuse rate up rate down Reply
1 reply to exnyorker's comment
sgantiques52

Which 5 year period in the Bush Administration had these types of figures?

May 02 2013 at 11:37 AM Report abuse rate up rate down Reply
seabirdsvc

Before you start clapping and slapping Obama on the back do some research. There are three types of "Unemployed" or "Underemployed". There are people who are recently "Unemployed" and collect unemployment on the records, there are the "Unemployed" who still can't find jobs but also can no longer collect unemployment and there are those that have gone back to work for less or part time. Its all a manipulation of the media how its reported. Nobody truly wants to see the USofA decline but with all the new taxes, laws, skyrocketing gas prices and costs on goods where do you think it will go? My small company just finished up a big project and laid off 13 employees. We are hoping the next big thing comes our way so we can employ more workers. Everyday we have someone coming in looking for work. The 1st financial quarter of 2013 will be reported in April for a lot of companies, we will then have a better look where the economy is headed. And the stock market is all based off of Quantitive Easing...Google it.

March 14 2013 at 11:38 AM Report abuse +2 rate up rate down Reply
Valerie

Of course the unemployment rate is falling! After the unemployment benefits are exhausted and people STILL don't have jobs, they fall off the radar. This country has no idea what the real number of the unemployed is!

March 14 2013 at 11:29 AM Report abuse +3 rate up rate down Reply
1 reply to Valerie's comment
summerctz

http://www.bls.gov/news.release/empsit.t15.htm

Check out the U6 stats. That encompasses everything. The real number is 14%!

March 14 2013 at 11:37 AM Report abuse +3 rate up rate down Reply
paul

pe your comment here 33200 Americans filed for unemployment and that is Good News ????????

what am I misssing Here? an additional 332,000 to the Millions already collecting and that is good news...

March 14 2013 at 11:12 AM Report abuse rate up rate down Reply
phasejump

This is continued great news. The naysayers are now beginning to look silly

March 14 2013 at 10:49 AM Report abuse -3 rate up rate down Reply
1 reply to phasejump's comment
rjmjlm711

Three counties in central N.Y posted there unemployment rate last night on the local news, it is the highest ever. There is nothing silly about it.

March 14 2013 at 11:39 AM Report abuse +1 rate up rate down Reply
smaj299622

This does not count the millions who cannot file for unemployment. Obama is a loser and a liar and things better get better soon or many bad things are going to happen in this country.

March 14 2013 at 9:52 AM Report abuse +6 rate up rate down Reply
1 reply to smaj299622's comment
gblank1603

Yes---as the article stated these are NEW claims and nothing else--try actually reading the article next time

March 14 2013 at 10:20 AM Report abuse rate up rate down Reply
1 reply to gblank1603's comment
summerctz

So then you agree, it's inaccurate as it ONLY includes new claims?

March 14 2013 at 11:39 AM Report abuse +1 rate up rate down
Master Wong

I wonder how long we will keep believing liar Obama and company's BS. I personally am sick to death of him and all of the rest of the lying politicians in Washington..
Enough, enough, God enough!!!!!!

March 14 2013 at 9:26 AM Report abuse +4 rate up rate down Reply
1 reply to Master Wong's comment
pgile

As long as you choose to ignore the facts. The rest of us will enjoy the greatly improved and improving U.S. economy. Enough.

March 14 2013 at 9:29 AM Report abuse -3 rate up rate down Reply
1 reply to pgile's comment
jshms

90 million people out of the workforce is not good, we currently have the lowest job participation rate in over 30 years

March 14 2013 at 11:06 AM Report abuse +1 rate up rate down

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