As payrolls gain, jobless-benefits claims fall again

Applications down 17,000 for week on holiday hiring

WASHINGTON — Fewer Americans filed applications for unemployment benefits last week as employers retained workers to meet demands of Christmas shoppers.

Weekly applications fell 17,000 to a seasonally adjusted 297,000, the Labor Department said Thursday. The four-week average, a less-volatile measure, rose 4,750 to 299,000.

“Overall the picture of labor is one of ongoing payroll gains and gradually firming wage growth,” said Gregory Daco, lead U.S. economist at Oxford Economics USA Inc. in New York. “If jobless claims are below that 300,000 threshold, that’s typically in line with strong payroll gains.”

Applications are a proxy for layoffs. As fewer people seek unemployment benefits, it suggests that employers are holding on to more workers and potentially looking to bolster their hiring.

Applications have been under 300,000 for 11 of the past 12 weeks, an unusually low level that suggests employers are anticipating stronger economic growth. The four-week average for unemployment claims has plummeted 9 percent over the past 12 months.

Such sharp declines in applications are unlikely to continue, analysts said. But at sub-300,000 levels, they point to better job gains in the Labor Department’s employment report, said Ian Shepherdson, chief economist at Pantheon Macroeconomics.

“The trend probably has now flattened off, but at an extraordinarily low level, consistent with very strong payroll numbers,” Shepherdson said.

The decline in application for unemployment benefits

has been matched by a surge in hiring.

Employers have added an average of 228,500 jobs a month this year, putting 2014 on pace to be the strongest year for hiring since 1999. That’s up from an average of 194,000 last year. The unemployment rate has fallen to a six-year low of 5.8 percent, down from 7.2 percent just a year ago.

The November jobs report being released today is expected to show gains of 225,000 last month, according to the data firm FactSet.

The payroll processor ADP said Wednesday that private companies added 208,000 jobs in November.

Even with gains this year and five years removed from the end of the recession, nearly 9 million people are out of work. Before the recession began in 2007, there were 7.6 million unemployed Americans. Less than a quarter of the people counted as jobless by the Labor Department are collecting unemployment benefits.

The recent job gains have not lifted wages by much, stifling the potential for the economy to grow more quickly. Average hourly pay rose 3 cents in October to $24.57. That’s just 2 percent above the average wage 12 months earlier and barely ahead of a 1.7 percent inflation rate.

Thursday’s report showed Minnesota attributed some of the increase in claims two weeks ago to bad weather. Ten other states said firings climbed in the construction industry, which could also mean inclement conditions slowed building projects.

Temperatures were at least 15 degrees Fahrenheit below normal in five states — Wisconsin, Iowa, Illinois, Indiana and Ohio — during the week that ended Nov. 22, according to the National Oceanic and Atmospheric Administration. Information for this article was contributed by Josh Boak of The Associated Press and by Nina Glinski, Victoria Stilwell and Chris Middleton of Bloomberg News.