WASHINGTON -- Fewer people sought unemployment aid last week for the second week in a row, the latest evidence that hiring is likely solid.
Weekly applications for unemployment aid dropped 10,000 to a seasonally adjusted 268,000, the Labor Department said Thursday. The four-week average, a less volatile measure, increased to 278,500.
The figures, along with other recent data, suggest the economy is picking up a bit after barely expanding in the first three months of the year. Applications are a proxy for layoffs, so last week's decline is a sign that companies are confident enough to hold on to their workers. When layoffs are low, hiring is typically steady.
Applications have been below 300,000, a historically low level, for 64 weeks, the longest such streak since 1973.
About 2.16 million people are receiving benefits, 3.1 percent lower than a year ago.
The U.S. economy expanded at just a 0.5 percent annual rate in the first quarter, after tepid growth of 1.4 percent in the final three months of last year.
However, in the past two weeks some economists said several reports have suggested growth will rebound in the April-June quarter to nearly 2.5 percent.
Sales at retail stores and restaurants jumped in April, evidence that Americans were willing to spend robustly after several months of caution.
And the housing market has perked up: Sales of previously owned homes rose last month, while sales of new homes soared to the highest level since 2008. Steady hiring and low mortgage rates have encouraged more Americans to take the plunge and buy a home. Housing construction also increased in April.
The improving economy, if sustained, could encourage the Federal Reserve to raise the short-term interest rate it controls for only the second time in nine years, perhaps as early as its next meeting in June or the following one in July.
A second report Thursday showed a decline in orders for business equipment in April, indicating American manufacturers continue to pull back.
Bookings for nonmilitary capital goods excluding aircraft dropped 0.8 percent after a revised 0.1 percent March decrease, data from the Commerce Department showed Thursday. Demand for all durable goods -- items meant to last at least three years -- rose 3.4 percent on a surge in the volatile commercial aircraft category.
Some companies are paring investment plans as they assess the demand outlook after weaker first-quarter growth and earnings, raising doubts about how quickly manufacturing can pull out of its slump. Global economies are struggling to improve, the oil industry has retrenched, and factory customers are bringing inventories more in line with sales.
"Business investment is going to continue to weigh on economic growth," Russell Price, a senior economist at Ameriprise Financial Inc. in Detroit, said before the report. "Companies are worried about the outlook. Until we see some traction, especially on corporate profits, we won't get an acceleration."
The median forecast in a Bloomberg survey for nondefense capital goods orders excluding aircraft, a proxy for future business investment in items such as computers, engines and communications equipment, called for a 0.3 percent advance after a previously reported 0.8 percent March drop. Those bookings have fallen an annualized 8.7 percent from February through April.
Shipments of those goods, used to calculate gross domestic product, rose 0.3 percent after falling 0.3 percent in March. Over the past three months, nondefense capital goods sales excluding planes have slumped an annualized 10.6 percent.
Information for this article was contributed by Christopher S. Rugaber of The Associated Press and by Shobhana Chandra of Bloomberg News.
Business on 05/27/2016