Christopher S. Rugaber
WASHINGTON: The number of people applying for U.S. unemployment benefits rose 14,000 last week to a seasonally adjusted 348,000, though the broader trend in applications remained stable.
But the four-week average was unchanged at 338,250, the Labor Department said Thursday. Applications are a rough proxy for layoffs. The average is not far above pre-recession levels, a sign companies are laying off few workers.
Economists said that winter storms two weeks ago may have caused some people to delay submitting their applications until last week, temporarily boosting the figures.
“Other evidence continues to point clearly to reasonably robust labor demand so we very much doubt the underlying trend in claims is picking up,” Ian Shepherdson, chief economist at Pantheon Macroeconomics, said in a note to clients.
Applications have been mostly steady in recent weeks, even though hiring faltered in January and February. That suggests employers may be reluctant to add many jobs, but they aren’t worried enough about future growth to step up layoffs.
Nearly 3.5 million people received unemployment aid in the week ending Feb. 8, the latest data available. That’s about 25,000 fewer than the previous week.
Harsh winter weather has chilled hiring in recent months. Employers added just 113,000 jobs in January. That followed a gain of only 75,000 in December. Those figures are about half the monthly pace of the past two years.
On the positive side, the unemployment rate fell in January to a five-year low of 6.6 percent from 6.7 percent, as more of those out of work found jobs. And hiring rose in manufacturing and construction, two higher-paying industries that are key drivers of growth.
Still, the bitterly cold weather has contributed to a run of disappointing economic data since the start of the year. Sales of existing homes plummeted in January to the slowest pace in 18 months, held back by the weather, higher interest rates and rising home prices.
Builders broke ground on 16 percent fewer homes in January compared with December, the Commerce Department said this week. That was the second straight decline. Developers also requested fewer permits in January for the third straight month, a sign homebuilding will remain lackluster in the near future.
And Americans cut back on their spending in retail stores and restaurants in January, the second straight drop.
With consumers cautious and the housing recovery slowing, economists have scaled back their forecasts for the January-March quarter. Most now expect growth in the first three months of the year to be 2 percent at an annual rate or below, down from forecasts of about 2.5 percent at the beginning of the year. Most expect growth to then pick up and reach nearly 3 percent for the full year, up from under 2 percent in 2013.