The U.S. Labor Department reports that applications for unemployment benefits rose last week after reaching a 5.5 year low. But companies continue to lay off fewer workers and may boost hiring over the next several months. First-time benefits applications rose by 13,000 to 336,000 during the week ending August 17, up from 323,000 during the previous week.
The less volatile four-week average fell by 2,250 to 330,500, the sixth consecutive decline and the lowest average since November 2007. The four-week average has fallen 5 percent over the past month, indicating a general drop in layoffs. The data also suggest employers added 200,000 jobs in August, a more improvement over the 162,000 added in July.
July saw the unemployment rate fall to 7.4 percent, down from 7.6 percent in June. Though the rate is still significantly higher than the 5 to 6 percent typical of a normal economy. The decrease in layoffs partly explains job growth over the year even with a slow-growth economy.
The economy grew at a 1.4 percent annual rate over the first half of 2013 leading hesitation in increased hiring. Growth in the second half of the year is predicted to rise to an approximate 2.5 percent annual rate as consumer spending grows thanks to diminished effects of earlier tax increases and spending cuts. Sales of previously occupied homes already jumped in July to an annual rate of 5.4 million; the most in 3.5 years.