Jobless claims down slightly
Claims for unemployment insurance fell in the past week. But across the nation the hunt for jobs continues as the jobless rate hovers around 9.2 percent. This jobs fair in Dallas was held July 13, 2011. Credit: AP
The number of Americans seeking unemployment benefits dipped last week, a sign the job market may be improving slowly.
Weekly applications for unemployment benefits edged down 1,000 to a seasonally adjusted 400,000, the Labor Department said Thursday. That's the lowest level in four months. The previous week's figure was revised upward from 398,000 to 401,000.
The four-week average, a less volatile figure, dropped for the fifth straight week to 407,750. That suggests there is a downward trend in layoffs.
Applications “have been grinding lower, and this week's result is at least not bad news, which at this point feels pretty good,“ BMO Capital economist Robert Kavcic said in an email.
Applications have been at or above 400,000 for 17 weeks. They fell in February to 375,000, a level that signals healthy job growth. They stayed below 400,000 for two months. But applications then surged to an eight-month high of 478,000 in April and have declined slowly since then.
The report comes a day before the government will release the July employment figures. Economists forecast that Friday's report will show that employers added a net total of 90,000 jobs. The unemployment rate is expected to remain unchanged at 9.2 percent.
That would be an improvement from June, when the economy added just 18,000 — the fewest in nine months. But at least three times as many new jobs are needed to substantially reduce the unemployment rate.
Many large companies have cut jobs in recent weeks. Pharmaceutical giant Merck & Co. said last week that it will eliminate 13,000 positions worldwide by 2015, about a third of them in the United States.
Cisco Systems Inc., the world's largest maker of computer-networking gear, last month said it is eliminating 6,500 positions, or about 9 percent of its worldwide workforce of 73,000. And Lockheed Martin said in June that it will cut 2,700 jobs.
Employers are pulling back as the economy struggles.
The economy grew at an annual rate of only 1.3 percent in the April-June period after barely expanded in the first three months of this year. Growth was less than 1 percent in the first half of the year, the weakest stretch since the recession officially ended.
Manufacturers expanded at their slowest pace in two years in July, a private trade group said Monday. The Institute for Supply Management also said that expansion among retailers, restaurants, financial services and service industries slowed to a 17-month low in July.
The two reports showed that there is little sign the economy is growing any faster in the July-September quarter than in the first half of this year.
A more cautious consumer is a key reason for the sluggish period. Americans cut their spending for the first time in 20 months in June, the government said Tuesday. For the entire April-June period, consumer spending rose only 0.1 percent, the worst showing since the recession ended.
Much of the slowdown stems from a spike in gas prices since last year. That has limited what consumers can spend on discretionary goods, such as furniture, electronics, and appliances. Spending on those categories has fallen for three straight months.
