Jobless-aid claims hit 7-month low

 In this Nov. 14, 2011 photo, job seekers line up to speak to recruiters during a career expo in  Las Colinas, Texas. Fewer people sought unemployment benefits last week, the fourth drop in the past five weeks. The decline indicates the economy���s modest growth is reducing layoffs and may lift hiring.
In this Nov. 14, 2011 photo, job seekers line up to speak to recruiters during a career expo in Las Colinas, Texas. Fewer people sought unemployment benefits last week, the fourth drop in the past five weeks. The decline indicates the economy���s modest growth is reducing layoffs and may lift hiring.

— The number of people applying for unemployment benefits fell last week to the lowest level since early April, a sign that layoffs are easing and hiring may pick up.

Weekly applications dropped by 5,000 to a seasonally adjusted 388,000, the Labor Department said Thursday. It was the fourth decline in five weeks.

The four-week average, a less volatile measure, dropped to 396,750. That’s the first time the average been below 400,000 in seven months.

Applications need to consistently drop below 375,000 to signal sustained job gains. They haven’t been that low since February.

The job market “is still weak but there are hopeful signs of some modest improvement,” Steven Wood, an economist at Insight Economics, said in a note to clients.

The number of people receiving benefits also fell to the lowest level since September 2008, when Lehman Brothers collapsed and the financial crisis intensified.

Some people may no longer be getting benefits because they’ve found jobs. But a larger number have likely used up all their benefits, Wood said.

The benefit rolls fell 57,000 to 3.6 million in the week ending Nov. 5. That’s one week behind the applications data. The figure is the lowest since Sept. 20, 2008.

That doesn’t include about 3 million additional people receiving extended benefits from emergency programs put in place during the recession. All told, 6.8 million people received benefits during the week that ended Oct. 29, the latest data available.

The pace of hiring over the past few months has been mixed. The economy added only 80,000 jobs in October, the fewest in four months. But the government also said this month that employers added more jobs in August and September than it had initially reported. The unemployment rate dipped to 9 percent.

The economy is growing but not quickly enough to generate many jobs. A series of reports this week shows manufacturers are producing more goods and consumers are spending more in retail stores.

Inflation may be peaking, too, largely because gasoline prices have fallen. That could help increase consumer spending, which fuels 70 percent of economic activity.

Stronger consumer spending this summer was a key reason the economy grew at an annual rate of 2.5 percent in the July-September quarter. Many economists forecast similar or slightly better growth for the quarter.

The economy needs to grow at nearly double that rate - consistently - to make a significant dent in the unemployment rate, which has been near 9 percent for more than two years.

Economists worry that consumers can’t sustain their spending growth from this summer without more jobs and higher pay. Consumers spent more in the third quarter while earning less. Many dipped into their savings to make up the difference.

A rebound in manufacturing could lead to more hiring. Factory output grew in October for the fourth-straight month, the Federal Reserve said Wednesday.

One concern is that Europe’s debt crisis could worsen and trigger a recession. That could slow demand for U.S. exports and stunt job growth.

Business, Pages 27 on 11/18/2011

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