Unemployment applications flat at 374,000
Friday, August 31, 2012
WASHINGTON -- The number of Americans seeking unemployment benefits was unchanged last week at a seasonally adjusted 374,000, suggesting slow improvement in the job market.
The Labor Department said Thursday that the four-week moving average, a less volatile measure, increased to 370,250.
Applications for unemployment benefits reflect the pace of layoffs. They have risen slightly over the past three weeks, though they remain lower than in spring, when hiring nearly stalled. Last week's number was revised upward to 374,000 from the 372,000 that was reported initially.
Still, when applications fall consistently below 375,000, it generally indicates that hiring is strong enough to lower the unemployment rate.
The latest applications data suggest that the government's employment report for August, to be released next week, will show job gains near the recent monthly average of 100,000, said Paul Dales, senior U.S. economist with Capital Economics. That isn't enough to drive down unemployment significantly.
"Given some of the indicators seen so far, the August payroll report is not going to look terribly inspirational," said Jennifer Lee, senior economist with BMO Capital Markets, in a note to clients.
Employers added 163,000 jobs in July. The hiring gains were an improvement from the previous three months, when the economy created an average of only 73,000 a month. But they weren't enough to lower the unemployment rate, which rose to 8.3 percent from 8.2 percent in June.
When the government releases the August jobs report Sept. 7, analysts expect it to say the economy added 118,000 jobs in August and that the unemployment rate held at 8.3 percent, according to FactSet.
Economists say stronger growth is needed to create more jobs and lower unemployment.
The economy grew at a tepid 1.7 percent annual rate in the April-June quarter, the government said Wednesday. That's much slower growth than the 2 percent rate in the January-March quarter and 4.1 percent rate in the final three months of 2011.
Economists expect the economy will keep growing modestly in the second half of the year but at a subpar rate of roughly 2 percent. Growth at or below 2 percent is not enough to lower the unemployment rate. Most economists expect the unemployment rate to stay above 8 percent for the rest of this year.
A weak economy and high unemployment could hurt President Barack Obama re-election chances and bolster Mitt Romney's campaign. Republicans in Tampa, Fla., this week to nominate Romney have pointed to the dismal growth in making the case to elect their candidate.
The Labor Department's report Thursday said the number of people receiving benefits continues to decline. The total fell to 5.5 million in the week ended Aug. 11, the latest period for which figures are available. That's down about 62,000 from the previous week.
Some of the decline likely results from people finding jobs. Many also are exhausting their benefits because of the still-struggling economy and job market.