WASHINGTON – The number of people seeking unemployment aid neared a four-year low last week, a positive sign that strong hiring could continue in the coming months.
The Labor Department said Thursday that weekly applications for unemployment benefits fell 15,000 to a seasonally adjusted 358,000. That’s the second-lowest level since April 2008.
The four-week average, a less volatile measure, fell to 366,250, the lowest since late April 2008.
“The encouraging U.S. employment news continues,” Jennifer Lee, an economist at BMO Capital Markets, wrote in a note to clients. The “job market started February off on a sturdy footing.”
When applications fall consistently below 375,000, it generally signals that hiring is strong enough to lower the unemployment rate.
Employers added a net gain of 243,000 jobs in January, the biggest gain in nine months. The unemployment rate fell for the fifth straight month to 8.3 percent, the lowest in nearly three years.
From November through January, the economy has added an average of 201,000 net jobs per month.
The increased hiring in part reflects faster economic growth. The economy expanded at an annual rate of 2.8 percent in the final three months of last year – a full percentage point higher than the previous quarter.
Applications are also falling because companies are laying off fewer workers. A separate report from the Labor Department, released earlier this week, showed that job cuts have fallen below pre-recession levels. Layoffs dropped last year to the lowest annual total in the 10 years the government has tracked the data.
With job cuts low, even a modest increase in hiring results in net job gains.
Most economists expect growth will slow a bit in the January-March quarter, because companies won’t need to rebuild their stockpiles of goods as much as they did in the winter.
But some economists are optimistic that the economy will steadily expand this year, given last month’s unexpectedly large job gains and other positive signs.
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