Even as the unemployment rate ticked up last week to 7.6 percent, the number of Americans seeking unemployment benefits fell by 12,000 to 334,000, suggesting recent job gains should continue. The four-week average also decreased by 7,250 to 345,250, still near the five year lows reached in May. Since January, layoffs have fallen 6.5 percent suggesting a decrease in job cuts.
Hiring has also been steady as employers added 175,000 jobs in May. Furthermore, the rise in unemployment is considered to be a direct effect of the rising confidence of workers as they rejoin the labor force and look for jobs. Additionally, retail sales rose 0.6 percent between April and May, showing consumers continue to spend despite higher taxes, potentially leading to a more quickly growing economy.
For the week ending May 25, approximately 4.5 million people received unemployment benefits, down 130,000 from the previous week and 29 percent lower than the number one year ago. While this decline is partly due to individuals becoming employed, many people have also simply run out of their allotted benefits. Meanwhile, the economy grew at a pace of 2.4 percent during Q1 2013 as consumer spending rose at its quickest pace in over two years.
More Americans also quit their jobs in April compared to March, indicating a growing confidence in the job market. Overall hiring rose in April and large U.S. companies appear more optimistic about sales over the next six months and expect to add more workers. Small business owners also seem somewhat more optimistic about sales and hiring in the near future.