U.S. unemployment aid applications rise to 365,000
8/2/2012WASHINGTON — The number of people seeking U.S. unemployment benefits rose last week, though the data was likely skewed higher by seasonal factors.
Weekly applications increased by 8,000 to a seasonally adjusted 365,000, the Labor Department said today. The four-week average, a less volatile measure, fell for the sixth straight week to 365,500, the lowest since March 31.
The decline in the four-week average suggests the job market could be improving a bit. But economists are viewing last month’s figures with some caution because the government struggles every July to account for temporary summer shutdowns in the auto industry. This year was even more complicated because some automakers skipped the shutdowns, resulting in fewer layoffs.
A Labor Department spokesman said the latest figures should be the last affected by the auto shutdown issues.
Even so, some economists saw positive signs in this week’s report.
“The net decline from a month ago is encouraging,” Jim O’Sullivan, chief U.S. economist at High Frequency Economics, said in an email to clients.
Consumers are holding back on spending and the economy is showing other signs of weakening. But the dip in applications shows that companies aren’t laying off workers in response, Mr. O’Sullivan said.
“Ongoing weakening in the labor market is invariably associated with a rising trend in [applications],” he said.
Weekly applications are a measure of layoffs. When they consistently fall below 375,000, it suggests hiring is strong enough to pull the unemployment rate down.
The seasonal distortions could affect the July employment report, which the Labor Department will release on Friday.
Economists predict employers added 100,000 jobs last month. That would be slightly better than the 75,000 a month average from April through June but still below the healthy 226,000 average in the first three months of the year. The unemployment rate is expected to stay at 8.2 percent.
The economy isn’t growing fast enough to lower the unemployment rate.
Growth slowed to an annual rate of just 1.5 percent from April through June, down from a 2 percent rate in the first quarter and a 4.1 percent rate in the fourth quarter of 2011.