Labor Department: Unemployment Applications Sink to 6-year Low
The U.S. Labor Department has reported that the number of Americans who have applied for benefits over the past month has reached a six-year low, concurrently indicating a decline in layoffs. The average number of people applying for benefits over the past four weeks fell by 6,250 to 335,500, the lowest since November 2007. Weekly applications for unemployment benefits actually increased by 5,000 last week to 333,000, up only slightly over the prior week.
Unemployment claims have fallen over 10 percent since the start of 2013, helping to drive up net job gains. But as far as job growth goes, the level of hiring and firing has demonstrated a clear disconnect. While employers added 162,000 jobs in July, most of the job growth was found in lower-paying industries and part-time positions. So far this year, the economy has added an average of 192,000 jobs per month.
Since an economy featuring low layoffs takes relatively few hires to show a high-net gain, the statistic isn’t particularly impressive. Even as employers are avoiding layoffs, they are typically reluctant to hire new workers due to higher taxes and federal spending cuts. While layoffs averaged 1.5 million per month through the first half of the year – even lower than in 2006 – total hiring in June fell by 289,000 to 4.2 million, the biggest one-month drop in three years.
Over 4.5 million people received unemployment aid during the week ending July 20, down 174,418 from the prior week. Total recipients of unemployment aid has fallen 21 percent over the year. Meanwhile, the unemployment rate now rests at 7.4 percent, still above the 5 to 6 percent rate predicted with a normal economy.