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US economy helps slight recovery in labor conditions
Aggregated Source: Shanghai Daily: Business

THE number of Americans seeking jobless benefits rose just 4,000 last week to a seasonally adjusted 352,000. The slight gain kept applications at a level consistent with modest hiring.

The Labor Department report released yesterday also noted that the four-week average, a less volatile measure, rose only 2,750 to 361,250.

Applications are a proxy for layoffs. They jumped three weeks ago to a four-month high, but then plummeted the following week. The sharp fluctuations reflected volatility around the Easter holiday, department officials said. Overall, applications have declined slightly since January.

"It appears the modest growth of the economy is continuing to support modest improvement in labor market conditions," said Jim Baird, chief investment officer at Plante Moran Financial Advisors.

Job growth slowed sharply in March. Employers added only 88,000 jobs last month, much lower than the average monthly gain of 220,000 from November through February.

The drop in applications over the past two weeks has led many economists to predict that the job market rebounded this month. Joseph LaVorgna, an economist at Deutsche Bank, said last week's level of applications is consistent with his forecast for 190,000 jobs created in April.

And a Federal Reserve report released on Wednesday suggested the job market did better in March than the government's employment report indicated. The Beige Book, which is based on anecdotal information, said the job market was unchanged or slightly better in the period from late February through early April.

Declines in applications signal that companies are laying off fewer workers. But layoffs are only half of the equation. Businesses also need to be confident enough in the economic outlook to add more jobs.

More than 5.1 million people got benefits in the week ended on March 30, the latest data available. That was 125,000 fewer than the previous week.

The jobless rate fell to 7.6 percent in March from 7.7 percent in February. Still, the drop occurred because more people out of work stopped looking for jobs. The government doesn't count people as unemployed unless they are actively looking for work.

The economy may grow quicker in the January-March quarter than in the final quarter of 2012. Most economists forecast growth could top an annual rate of 3 percent in the first quarter, up from 0.4 percent in the fourth quarter.


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Copyright Shanghai Daily: Business