The rate of Americans applying for unemployment benefits dropped by 15,000 earlier this month to a seasonally adjusted 320,000. While that figure is certainly nothing to boast about, it does mark the lowest point since October of 2007 – another indication that layoffs have stalled, and that the pace of job growth is consistent, albeit modest.
On Thursday, a spokesman for the U.S. Labor Department announced that the 4-week average had declined to 332,000 (down by 4,000 unemployment claims) also the fewest since 2007 and the 5th straight period of decline.
Employers are undoubtedly laying off fewer workers with every month that ticks by, and that trend has cumulatively reduced the number of Americans seeking unemployment benefits by 14% this year along. Yet many employment attorneys point out that hiring is still slow-moving, and therefore net job growth has been less than many hoped for.
When the recession hit bottom in March 2009, applications for unemployment benefits reached 670,000 per week. Those numbers have fallen steadily ever since.
“The underlying story in jobless claims is one of a continued improvement,” wrote Yelena Shulyatyeva, an economist at BNP Paribas. But Americans are eager to “see the pace of hiring pick up in order for payroll growth to accelerate from its current pace.”
Close to 4.6 million Americans collected unemployment benefits during the first week in August, the most recent period for which data are available. Although this works out to roughly 66,000 more than in mid-July, it is almost 20% lower than a year ago.
Construction Site Injuries
One sector where a softening of layoffs has made the biggest impact is in construction. This industry was hemorrhaging job at the bottom of the recession, but a rebound in the housing market, those jobs have been steadily climbing. Another helpful factor has been a drop in incidents of construction site injury, which has kept more workers on the job.
According to the Labor Department, layoffs have hovered around 1 and a half million per month through the summer, which is below the average of nearly 1.8 million per month in 2006 (a pre-recession year). And of course many other workers left their jobs voluntarily.
Yet hiring hasn’t bounced back with the same momentum. About 4.3 million people have stepped into new jobs every month this year through June, which is significantly below the 2006 monthly average of 5.3 million new jobs. Because of this halting figure, net job growth remains subpar.
Employers have added about 192,000 jobs each month this year. The unemployment rate has dipped to 7.4 percent, marking a 5-year low. Yet again, it’s still far above the 5 – 6% range typical of a “normal” economy in the U.S.