WASHINGTON – More Americans applied for jobless aid last week. Despite the small increase, the number of people seeking benefits remained close to historic lows.
The numbers: Weekly unemployment applications rose by 3,000 to a seasonally-adjusted 244,000, the Labor Department said Thursday. The less volatile four-week average declined 1,000 to 241,000. The number of people collecting unemployment benefits has fallen 8.8 percent over the past 12 months to 1.97 million.
The takeaway: The job market appears solid as the U.S. enters its ninth year of recovery from the Great Recession. Employers are holding onto workers with the expectation that business will continue to improve. Jobless claims – a close indication of layoffs – have come in below 300,000 for 127 weeks in a row. That’s the longest such stretch since 1970, when the U.S. population was much smaller.
The unemployment rate has fallen to a 16-year low of 4.3 percent. The government’s report for July, issued last week, showed that U.S. employers added 209,000 jobs. A particular bright spot is the fact that more Americans are coming off the sidelines and finding jobs.
Key drivers: The economy revved up this spring after a weak start to the year, fueled by a surge in consumer spending. The gross domestic product, the economy’s total output of goods and services, expanded at a 2.6 percent annual rate in the April-June quarter. That’s more than double the revised 1.2 percent in the first quarter.
This year, the economy is expected to grow at about 2 percent. That would be roughly in line with annual gains seen during the recovery. Consistent hiring has helped sustain the gradual recovery, although the expansion is starting to show its age as the pace of job gains has slowed this year.
Despite the steady strengthening of the job market, the Federal Reserve has yet to see inflation return to desired levels, so it’s left its key interest rate unchanged for now.
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