Applications for US unemployment benefits slipped last week

In this Tuesday, July 19, 2016, photo, people stand in line to apply for a job with Aldi at a job fair in Miami Lakes, Fla. On Thursday, Aug. 25, 2016, the Labor Department reports on the number of people who applied for unemployment benefits a week earlier. (AP Photo/Lynne Sladky)

WASHINGTON — Slightly fewer people filed for U.S. unemployment benefits last week, a sign the American job market remains healthy.

THE NUMBERS: The Labor Department said Thursday that applications for jobless aid slipped by 1,000 to a seasonally adjusted 261,000. The less volatile four-week average dropped by 1,250 to 264,000. Overall, the number of people receiving unemployment checks fell by 30,000 to 2.15 million, down 5 percent from a year earlier.

THE TAKEAWAY: Applications are a proxy for layoffs. They have remained below 300,000 for 77 straight weeks, longest streak since 1970. The current reading is even more impressive because the population has grown considerably since then.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, suspects the flooding in Louisiana will put some people out of work and send unemployment claims higher over the next week. Overall, he says, "employers remain fundamentally optimistic over the economic outlook."

KEY DRIVERS: The U.S. unemployment rate is 4.9 percent. Employers added 255,000 jobs in July and 292,000 in June.

Hiring is strong even though the economy has registered lackluster growth since late 2015. The economy expanded at an annual pace of 1.2 percent from April through June after growing just 0.8 percent in the first quarter and 0.9 percent in the fourth quarter of 2015.

Solid hiring amid slow growth is worrisome. It shows that the economy is less productive, with more workers needed to produce the same or slightly more output. Productivity, or the amount of output per hour, has dropped 0.4 percent over the past year.

Weak productivity growth could hobble the U.S. economy and keep a lid on pay gains. Greater productivity allows companies to boost workers' pay without raising prices.

Must Read

Trump's shrinking trade appeal evident in North...

Aug 22, 2016

North Carolina may be the state most pivotal to Donald Trump's White House bid, and the audience...

US new-home sales climb to best level since late...

Aug 23, 2016

US sales of new homes soared 12.4 percent in July to best level since October 2007

Ahead of the Bell: US existing-home sales

Aug 24, 2016

US home sales expected to dip 1.3 percent in July after hitting nine-year high in June

Yellen, in speech Friday, could send signal about...

Aug 26, 2016

Yellen, in Jackson Hole speech Friday, could send a signal about timetable for next rate hike

Iowa at center of debate over 'shadow insurance'...

Aug 30, 2016

Life insurance companies are setting up "shadow insurers" to take on some of their liabilities and...

Sign up now!

About Us

In The Headline sought to bring professionalism back into journalism, bringing you only the most exclusive and the most impactive news from all over the globe.

Contact us: sales[at]intheheadline.com