U.S. jobless claims remain at 5-year low

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March 21, 2013, 10:22 a.m. EDT

U.S. jobless claims remain near 5-year low

New applications for benefits edge up to 336,000 from 334,000

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By Jeffry Bartash, MarketWatch

WASHINGTON (MarketWatch) — The number of Americans who applied last week for new unemployment benefits rose slightly but clung near a five-year low, another indication that fewer people are losing their jobs.

Initial jobless claims rose by 2,000 to a seasonally adjusted 336,000 in the week ended March 16, the Labor Department said Thursday. Economists surveyed by MarketWatch forecast expected claims to rise to 340,000 from a revised 334,000 in the prior week.

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The average of new claims over the past month, which irons out some of the weekly volatility, declined by 7,500 to 339,750. That is the lowest level since February 2008.
Jobless claims, a rough gauge of layoffs, have fallen below 350,000 in five of the past six weeks, marking the first time that has happened since late 2007, shortly before the Great Recession began.
The “persistent decline in claims well after the Hurricane Sandy unwind tells us that underlying economic conditions are improving,” said Neil Dutta, head of economics at Renaissance Macro Research. “That is helping raise the price investors are willing to pay for future profits, sending equity prices higher.”
The sharp decline in layoffs over the past year, however, hasn’t been matched by a similarly rapid pace of hiring. The U.S. has added an average of more than 200,000 jobs a month in the past four months in a sharp acceleration from last summer, but the unemployment rate has been stuck just below 8%.

Reuters

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Job seekers wait to meet with employers at a career fair in New York City.

Moreover, some economists expect hiring to be partly constrained in the spring and early summer because of billions in federal spending cuts that kicked in earlier this month under a law known as a sequester. The federal government and companies that do lots of business with the government, particularly defense firms, may have to furlough or lay off workers.
Other indicators, however, suggest more companies may be looking to hire, so it may take several months to find out if the latest burst of job growth has staying power.
In the week ended March 9, continuing claims rose by 5,000 to a seasonally adjusted 3.05 million, the Labor Department said. Continuing claims reflect the number of people who already receive regular unemployment checks after losing a job and applying successfully for benefits.