WASHINGTON - The number of people seeking U.S. unemployment benefits surged 24,000 to a seasonally adjusted 329,000 last week, though the gain likely reflected temporary layoffs in the week before Easter.
The Labor Department said Thursday that the four-week average of applications, a less volatile number, rose 4,750 to 316,750. The four-week average fell two weeks ago to its lowest level since October 2007, two months before the recession began.
“You’re hard-pressed to make much of weekly wiggles. We still expect that the broader trend in claims will continue to hover around 300,000,” said Tom Porcelli, chief U.S. economist at RBC Capital Markets LLC in New York. “It’s encouraging that the firing side of the equation continues to show improvement, and that’s what’s been happening, even with today’s number.”
Applications can be volatile around Easter, because many school systems temporarily lay off bus drivers, cafeteria workers and other employees during spring break. Some of those workers file for unemployment benefits. Because the timing of Easter shifts each year, it can be difficult for the government to seasonally adjust for the day. Last year, Easter fell on March 30, this year on April 20.
“The underlying trend in claims is falling, albeit slowly,” said Ian Shepherdson, an economist at Pantheon Macroeconomics. “When the economy picks up, companies hold back on firings before they start increasing hiring, so a sustained drop in claims would be a clearly positive sign” for hiring.
Despite the volatility, applications for unemployment benefits have generally declined in recent months, a hopeful sign for the job market. Three weeks ago, they fell to 301,000, the lowest level in nearly seven years.
A year ago, they stood at 343,000. Because applications are a proxy for layoffs, the low level is a sign that employers expect consumer demand to continue and are holding onto their workers.
About 2.9 million people received benefits in the week that ended April 5, the most recent period for which data were available. That was about 85,000 fewer than in the previous week.
In the meantime, hiring has picked up. Employers added192,000 jobs in March, according to a separate government report. That followed gains of 197,000 in February. The unemployment rate has declined in recent months but remains a high at 6.7 percent.
Winter storms in December and January shut down factories, kept shoppers away from stores and depressed home buying.
That reduced hiring and overall economic growth. Employers added only 84,000 jobs in December and just 129,000 in January.
More jobs and higher incomes will be needed to prompt healthier overall economic growth. For now, economists think the bad weather contributed to weak growth of 1 percent to 1.5 percent at an annual rate in the January-March quarter. But with the weather improving, most analysts expect growth to rebound to an annual rate of nearly 3 percent in the April-June quarter.
Orders to U.S. factories for long-lasting manufactured goods posted a solid gain for the second straight month in March, and a key category that signals business investment plans increased at the fastest pace in four months.
Orders for durable goods increased 2.6 percent in March after a 2.1 percent rise in February, the Commerce Department reported Thursday. Those back-to-back gains followed two big declines in December and January, which had raised concerns about possible weakness in manufacturing.
Demand for core capital goods, considered a good guide for business investment plans, rose 2.2 percent in March after a 1.1 percent drop in February. It was the best showing since a 3 percent rise in November.
Analysts were encouraged with the widespread strength shown in the March orders increase, saying it was an indication that manufacturing was recovering after a cold winter disrupted business activity.
“The gains were spread across most sectors, from primary metals to computers,” Shepherdson said.
He and other analysts said the March report was an encouraging sign that increased factory production will lift overall economic growth in coming months.
The strength in March was widespread, led by a 4 percent increase in demand for transportation goods. Orders for commercial aircraft advanced 8.6 percent while demand for motor vehicles and parts rose a more modest 0.4 percent.
Excluding transportation, orders rose a solid 2 percent, the best showing in this category in more than a year.
Information for this article was contributed by Christopher S. Rugaber and Martin Crutsinger of The Associated Press and Jeanna Smialek of Bloomberg News.
Business, Pages 29 on 04/25/2014