Modest Hiring Indicated by Jump in Unemployment Claims

Unemployment benefits claims rose by 20,000 last week raising the adjusted number to 362,000 indicating a slow but steadily improving job market. Meanwhile, the four-week average rose by 8,000 claims to 360,750, a six-week high. Even with the jump in claims, applications have trended downward having declined 7.5 percent over the past three months and hit a five-year low three weeks ago.

Employers added an average of 200,000 jobs per month from November to January, up from about 150,000 during August through October. It is predicted that the unemployment rate will continue to slowly decline if hiring continues at last year’s average monthly pace of 180,000 jobs. For the week ending February 2, a total of 5.6 million people received unemployment benefits, about 300,000 fewer than the prior week. This number includes those workers no longer receiving benefits and those having exhausted them.

During Q4 2012, the U.S. economy shrank at an annual rate of 0.1 percent due to big cuts in defense spending, a decline in exports, and slow growth in company stockpiles. The slight decline was much worse than the 3.1 percent growth experienced during Q3. However, economists expect a revised figure to show a small increase in the data to the tune of about a 0.4 percent annual growth rate. Growth is also expected to pick up during Q1 2013 to an annual rate of 1.5 percent, better than Q4 but worse than last year’s expansion of 2.2 percent.