VOL. 126 | NO. 39 | Friday, February 25, 2011
Fewer People Sought Unemployment Aid Last Week
CHRISTOPHER S. RUGABER | AP Economics Writer
WASHINGTON (AP) – Fewer people requested unemployment benefits last week, pushing the average number of applications over the past four weeks to the lowest level in more than two and a half years.
Applications for unemployment benefits dropped by 22,000 last week to a seasonally adjusted 391,000, the Labor Department said Thursday. It was the third decline in the past four weeks.
The four-week average for applications, a less volatile figure, fell to 402,000. That's the lowest number since late July 2008 and a hopeful sign that the job market is slowly improving.
The downward trend in applications indicates that layoffs are dropping steadily. But economists are still unsure when employers will begin hiring enough to make a dent in the 9 percent unemployment rate.
Applications below 425,000 tend to signal modest job growth. But they would need to dip consistently to 375,000 or below to indicate a significant decline in the unemployment rate. Applications for benefits peaked during the recession at 651,000.
"While layoffs have come way down, new hiring hasn't picked up appreciably," said Cary Leahey, an economist at Decision Economics. "Many firms are still sitting on the fence."
The report is the first in several weeks that wasn't distorted by harsh winter weather. Three weeks ago, big snowstorms closed government offices in several states and made it harder for recently laid-off workers to apply for benefits. That caused applications to fall to 385,000, the lowest point in nearly three years. Applications bounced back the following week when government offices reopened.
Last week was only the third time since the recession ended in June 2009 that fewer than 400,000 people requested unemployment benefits.
The economy is growing, but not quickly enough to encourage rapid hiring. The nation's gross domestic product, the broadest measure of the output of goods and services, rose at a 3.2 percent annual rate in the October-December quarter. The government will update its fourth-quarter estimate Friday, and economists project it will revise the figure slightly, to 3.3 percent.
The number of people receiving benefits also fell sharply to 3.79 million, the smallest total since October 2008.
That doesn't include millions of people enrolled in emergency unemployment benefit programs funded by the federal government. Another 4.45 million unemployed workers received benefits under the extended programs during the week ending Feb. 5, the latest data available. All told, about 9.2 million people were on the benefit rolls that week, 90,000 fewer than the previous week.
Some companies continue to lay off workers. Medtronic Inc., the world's largest medical device maker, said Tuesday it will cut up to 2,000 jobs in response to slower sales growth.
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