Unemployment benefits claims fall 12,000

Fewer Americans applied for unemployment benefits last week, and a private survey showed businesses stepped up hiring in August. The data sketched a brighter outlook for the U.S. job market one day before the government reports on August employment.

On Thursday, the Labor Department said applications for jobless benefits declined 12,000 to a seasonally adjusted 365,000. Weekly applications are a measure of the pace of layoffs. When the level is consistently below 375,000, hiring is generally strong enough to lower the unemployment rate.

Further evidence the economy may be improving: Service companies grew at a faster pace in August than the month before. The Institute for Supply Management's index of non-manufacturing activity rose in August to 53.7. That's up from July's reading of 52.6, according to the trade group of the nation's purchasing managers. Any reading above 50 indicates expansion.

Service companies employ roughly 90% of the work force, including retail and construction companies to health care and financial services firms. The sector has grown for 32 straight months.

However, investors are mostly focused on Friday's monthly employment report. Economists forecast that employers added 135,000 jobs last month, while the unemployment rate stays unchanged at 8.3%.

To get the unemployment rate to fall, growth needs to be at a 2% annual rate or higher over time. The economy grew at a 1.7% annual rate in the April-June quarter, down from 2% in the January-March quarter and 4.1% in the final three months of last year.
Weekly unemployment claims


In July, employers added 163,000 nonfarm jobs, which includes private-sector and government hiring. That was the best month of job creation since February and an improvement from the average of 73,000 per month created in the April-June quarter.

A weak August employment report could push the Federal Reserve, when it meets next week, to approve further action for helping the ailing economy.

On claims for unemployment benefits, the four-week average, a less volatile measure, ticked up to 371,250 the weekend Sept. 1. The drop likely won't affect the August jobs report. Data for that report were compiled three weeks ago.

However, a private survey out Thursday shows U.S. businesses stepped up hiring in August. Payroll provider ADP says companies added 201,000 jobs last month, the most reported by the survey since March.

ADP also said private-sector July job growth was stronger than first thought: Employers created 173,000 jobs — 10,000 more jobs than the group initially reported.

In July, the government and ADP reported roughly the same private-sector job creation. But the two surveys have diverged sharply in previous months.

TAGS: ,


Photo Gallery

0 Comments Write your comment

    1. Loading...