Applications for jobless aid rise but stay at healthy level

WASHINGTON – More Americans applied for unemployment benefits last week, but their numbers remained at low levels consistent with a healthy job market.

THE NUMBERS: The number of people seeking jobless aid rose by 7,000 to a seasonally adjusted 265,000, the Labor Department said Thursday. The less-volatile four-week average rose by 750 to 268,000. The number of people collecting unemployment checks was 2.24 million, down nearly 7 per cent from a year earlier. Weekly claims have now been below 300,000 for 54 straight weeks, longest streak since 1973.

THE TAKEAWAY: The numbers reflect a healthy job market. Jobless claims are a proxy for layoffs. Employers added 242,000 jobs last month, and the unemployment rate stayed at an eight-year low of 4.9 per cent.

“It is hard to believe that the labour market could strengthen even further, but the claims data would suggest that it may have,” Stephen Stanley, chief economist at Amherst Pierpont Securities, wrote in a research note.

KEY DRIVERS: The American economy has proven resilient in the face of economic weakness overseas and volatility in financial markets.

U.S. consumers are spending at a healthy pace. They are spending more at restaurants and on mobile data. Low gasoline prices have also left more money to spend on other items.

Consumers are also confident enough to purchase big-ticket items like homes and cars. Construction firms are hiring. But factories have cut output because exports have been hurt by faltering demand in foreign markets and a strong dollar that makes U.S. goods more expensive overseas.