Number of Applications for Unemployment Benefits Reaches Pre-recession Level
Applications for jobless benefits have fallen to pre-recession levels as the number dropped by 9,000 to 336,000 last week. The four-week average, which is elevated due to the partial government shut down and backlogs being received from California, dropped by 9,250 to 348,250. Last week was the fourth consecutive week with falling numbers of applications.
The decline in jobless claims suggests a correlative fall in layoffs, though employers are still not hiring many new workers. Hiring has continued to slow over the past several months even as job gains typically follows declines in applications. During Q3 2013, the economy added an average of 143,000 jobs per month, down from 182,000 during Q2 and 207,000 during Q1.
October’s job report is also expected to continue the decline as economists predict the addition of just 122,000 jobs that month. The unemployment rate has also risen back up to 7.3 percent. Much of the expected weakness in October’s report is due, at least in part, to the government shut down and the resulting temporary rise in unemployment. That spike in the jobless rate is predicted to be reversed in November. Before the government shut down, the economy had been accelerating at an annual rate of 2.8 percent in Q3, up from 2.5 percent during Q2.