The Labor Department said on Thursday that the less volatile four-week average of new jobless claims dropped 6,250, to 336,750. That is the fewest since November 2007, a month before the recession began.
Weekly jobless claims applications have fallen about 9 percent since November and are now at a level consistent with a healthy economy. The last time jobless claims were lower was in January 2008, when they were 321,000.
Economists were largely encouraged by the decline.
“This is a very positive trend and we should embrace it,” Jennifer Lee, an economist at BMO Capital Markets, said in an e-mail to clients.
The job market has also improved over the last six months. Net job gains have averaged of 208,000 a month from November through April. That is up from only 138,000 a month in the previous six months.
New jobless claims are in effect a proxy for layoffs, and much of the job growth has come from fewer layoffs — not increased hiring. Layoffs fell in January to the lowest level on records dating back 12 years, though they have risen moderately since then. Overall hiring remains far below prerecession levels and unemployment remained high at 7.5 percent in April.
For hiring to increase enough to rapidly lower the unemployment rate, companies must gain more confidence in the economy. But some employers have held off adding new workers in recent months, possibly because of concerns about the impact of federal spending cuts and tax increases.
Dean Maki, an economist at Barclays Capital, said the decline in new jobless claims suggested that companies were not too worried about the fiscal drag of spending cuts and tax increases. He noted that employers were responding to the government’s actions by reducing hiring and cutting back on their employees’ hours — not laying off workers. That means they anticipate the weakness will be temporary.
About 4.9 million people collected unemployment aid in the week that ended April 20, the most recent period for which figures are available. That is about 90,000 fewer than the previous week.
Separately, the Commerce Department said Thursday that wholesale inventories rose 0.4 percent in March compared with February, when they had fallen 0.3 percent.
Sales in March dropped 1.6 percent, the biggest setback since March 2009, when the country was in recession. Sales had risen 1.5 percent in February.
Inventory rebuilding can be a positive for economic growth because it means stronger production at the nation’s factories. The March increase left inventories at $503.1 billion, up 4.7 percent from a year ago and 30.7 percent above the recession low.
But increased restocking at a time of falling sales can signal trouble for the economy. The falling demand could lead businesses to reverse course and cut their stockpiles. Those cutbacks would damp factory production and economic growth.
The buildup of inventories in March was largely a result of a 0.5 percent increase in restocking of durable goods. These are items that are expected to last at least three years.
Article source: http://www.nytimes.com/2013/05/10/business/economy/jobless-applications-fall-to-lowest-since-2008.html?partner=rss&emc=rss
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