WASHINGTON (AP) — The number of people applying for unemployment benefits fell last week, though the decline isn’t enough to signal improvement in the job market.
Weekly applications dropped by 9,000 to a seasonally adjusted 423,000, the Labor Department said Thursday.
The four-week average, a less volatile figure, rose slightly for the fifth straight week to 421,000.
Applications typically need to fall below 375,000 to significantly lower the unemployment rate. They haven’t been that low since February.
Higher unemployment benefit applications may signal that more employers are laying off workers amid growing worries that the economy has weakened. Still, economists say the main problem is that there are few jobs for the 14 million people who are unemployed.
Many businesses pulled back on hiring after seeing demand for their products drop. Consumers have had less money to spend on discretionary goods because they are paying higher prices for gas and food, while seeing meager pay raises. That has taken a toll on the economy because consumer spending fuels 70 percent of growth.
In the first half of the year, the economy expanded at an annual rate of just 0.7 percent. In August, employers added no net jobs, and consumers didn’t increase their spending on retail goods.
Most economists expect the economy will grow no more than 2 percent for the year. That’s barely enough to keep up with population growth, and far below the 5 percent rate that most economists say is needed to bring down the unemployment rate.
The unemployment rate has been above 9 percent in all but two months since the recession officially ended more than two years ago.
Such weakness has raised pressure on President Barack Obama and the Federal Reserve to boost economic growth.
On Wednesday, the Fed said it will try to push long-term interest rates lower and make consumer and business loans cheaper by shifting $400 billion out of short-term Treasury securities and into longer-term bonds. The central bank said it will also reinvest the proceeds from its maturing mortgage-backed securities into new mortgage-backed bonds. That should reduce mortgage rates.
President Barack Obama, meanwhile, has proposed a $447 billion job-creation package. He wants to cut Social Security taxes for workers, extend unemployment benefits, cut taxes for small businesses and spend more federal money to build roads, bridges and other public works projects.
But the president’s proposal faces opposition in Congress. Republicans object to his proposal to pay for the plan with higher taxes on wealthier households, hedge fund managers and oil companies.