Unemployment Apps Resume Downward Movement
The number of unemployment aid seekers dropped by 27,000 during the week ending February 9 resuming a slow decline in applications over the past several weeks. The Department of Labor reported that weekly applications dropped to 341,000; a three week low. The four-week average rose slightly to 352,500 coming off the previous week’s five-year low of 351,000. The four-week average has also fallen 5 percent since November indicating a rise in net hiring.
From November to January, employers added a monthly average of 200,000 jobs, including 157,000 jobs last month. Even as unemployment remains high, economist predict that it will gradually declines if hiring continues at the rate of January’s pace of 180,000 jobs. Comparatively, the national unemployment rate fell 0.7 percent in 2012.
As the number of individuals applying for unemployment benefits dropped, the number of people receiving them rose to over 5.9 million people during the week ending January 26; 325,000 more than the previous week. Also, during Q4 2012, the economy contracted at a 0.1 percent annual rate due mainly to large cuts in defense spending and fewer exports. Economists expect growth to pick up slightly during Q1 2013 with predictions suggesting an annual growth rate of 1.5 percent, well below last year’s average expansion rate of 2.2 percent. Some economists also expect Q4 growth numbers to be revised over the coming months to show a 0.5 percent increase, rather than the current slight contraction.