More seek jobless aid, but trend is positive

The number of people seeking unemployment benefits rose last week to a seasonally adjusted 377,000, up from a nearly four-year low the previous week. But the longer-term trend is pointing to a healthier job market. Applications have trended down over the past few months. The four-week average has declined to 377,500. When applications fall consistently below 375,000, it tends to signal that hiring is strong enough to lower the unemployment rate. Some economists say the figures suggest further job gains ahead. The nation has added at least 100,000 jobs for six straight months. And the unemployment rate has declined to 8.5 per cent, its lowest in almost three years. Article continues below Business sentiment "is now rebounding and with better bank credit availability now supporting rather than hindering businesses, claims will fall further," Ian Shepherdson, an economist at High Frequency Economics, said in a note to clients. Separately, orders for long-lasting manufactured goods rose as companies spent more on computers, machinery and other equipment. The Commerce Department said on Thursday that durable goods orders rose three per cent last month. The number of first-time unemployment applications rose 21,000 last week, the Labour Department said. Applications had plummeted two weeks ago to their lowest level since April 2008. The average has fallen about nine per cent since October 1. Unemployment applications have been particularly volatile this month because employers have cut temporary workers hired for the holidays. The department adjusts for seasonal trends. But doing so accurately can be difficult. But underneath all the volatility, applications have levelled off in recent weeks. Steven Wood, an economist at Insight Economics, said the longer-term trend suggests that the January jobs report, to be released this week, will show a ‘solid gain' in hiring.