WASHINGTON (AP) — 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.
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 two 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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MAY 21 Here's a post on the Advocate (but buried on a subpage, not on the front) that reports something Louisiana Voice reported some time ago: a top DOE official lives in Los Angeles and "commutes" to Baton Rouge. The positioning of the story caused a stir on Facebook Monday, with several posters asking if the Advocate was covering someone's hiney. Sentell's stories on DOE are notoriously soft, and this one is no different: don't expect any hard questions in here.
MAY 21 Here's another post from blogger Tom Aswell about the "course choice" program. He's already reported on kids being signed up without their consent or knowledge, and has more here: For example, he tells of a six-year-old who was signed up for high school Latin. He also digs a little deeper into the sister companies of the main one operating in Louisiana; all of them seem to have complaints against them. Stinky.
MAY 21 Given the 80 percent cut in higher ed funding since he's been in office, it's clear Gov. Jindal would rather give tax cuts to out of state companies than have a functioning system, blogger Dayne Sherman argues in this post. The cuts have been such a disaster, Sherman says, that it will take 30 years to fix what's been broken. He says he believes the aim is to shut down most of the schools before Jindal leaves in 2016.
MAY 21 Blogger CB Forgotston says there are too many elections in Louisiana, and they're costing us too much money. The proof is in the pudding: turnout for most of these nonsensical pollings gets worse and worse, CB opines, even as millions of dollars that could be spent on health care or higher ed go down the tubes. The legislature must take action to stem the tide of pointless elections, he says.
MAY 21 Here's an interesting investigative piece by WVUE on the retirement benefits of some Jefferson Parish public employees. According to the story, the taxpayers are paying 100 percent of the retirement contributions of employees who started work prior to a certain date in April 1986 -- and have done for more than 30 years. It costs the parish millions annually, and might not be legal, the story reports.
MAY 21 This post on Bayou Buzz provides insight from Louisiana's intrepid pollster, Bernie Pinsonat, on the winners and losers from this year's legislative session. But to hear Bernie tell it, there's almost nuttin but losers: Jindal, the Republican party, the Fiscal Hawks all get big goose eggs in his win column.
MAY 20 This post on The Lens takes a look at a huge (either $500K or $250K) bill that one NOLA charter now has for school lunches. The RSD says the charter group didn't fill out the proper paperwork for federal reimbursement, but the story details how the RSD didn't ensure the people running the charter had the proper training, despite requests from hapless charter employees trying to fill out forms. Either way, somebody's asleep at the wheel.
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