As reported by the U.S. Labor Department, applications for unemployment benefits remained at a six-week low for the week ending January 18. Unemployment claims rose by 1,000 to 326,000 during that week, below the 330,000 projected by 50 economists in a Bloomberg survey. Business and consumer spending continue to improve amidst a more optimistic growth outlook for the U.S. economy. Hiring gains remain healthy and wages are beginning to pick up after a disappointing gain in December payrolls.
The less volatile four-week average of claims dropped to 331,500 from the prior week’s 335,250 and the previous December’s average of 343,750 claims. The number of people receiving unemployment benefits rose to 3.06 million, a rise of 34,000 for the week ending January 11; the highest number since July. The report also indicated that approximately 1.35 million Americans lost their emergency extended benefits after the program expired at the end of 2013.
Employers added fewer workers than projected in December, increasing payrolls by just 74,000, the smallest gain in two years and smaller than even the lowest predictions in the Bloomberg survey. Job growth averaged 182,170 per month in 2013, virtually flat with 2012’s number. Economists project payrolls to increase to an average of about 200,000 per month during 2014.
The Federal Reserve predicts the unemployment rate may fall as low as 6.3 percent by the end of 2014 while many companies are gaining confidence in the economy, which may improve employment prospects.