The previous week marked the lowest level of applications for unemployment aid in the US in the past four years. The drop in number of applicants help to demonstrate the strengthening of the job market, leading to increased rates of hiring.
According to a report the Labor Department issued Thursday, seasonally adjusted weekly applications dropped by 5000 to 348,000. That was the lowest recorded level from March 2008 when the Great Recession had taken just a few months. Although the average applications within a four-week period are not as volatile as the weekly applications, they also matched the four-year record low by dropping to 355,000.
Applications for unemployment aid have been declining steadily since last fall. The lowest records have come within the three months that have seen the best hiring rates in the past two years. On average, US employers added about 245,000 jobs each month between December 2011 and February 2012. The increased rate of employment has pushed the unemployment rate down to 8.3 percent, which is the lowest rate recorded in the past three years.
The Labor Department’s report indicates that the number of employees added this month matches the same rate. The figures released last week included the week when the department surveyed companies about March hiring. The applications recorded last week were slightly lower than those recorded in February’s survey. That drop indicated that the job market was still growing
According to an economist at the BMO Capital Markets, Jennifer Lee, the employment growth in the country seemed to have progressed “at a respectable pace” in March.
In another study, the measurement of future economic activity in the country continued a steady rise for the fifth month. According to the Conference Board, the leading economic indicators’ index for February rose 0.7 percent. The index had risen 0.2 percent in January.
The Conference Board designed the index to predict the economic conditions expected within the coming three to six months. Most of the components of the index have been published.
Since the economy has started to pick up, companies have started to hire more workers. The last three months of 2011 saw an annual economic growth rate of three percent. The rate recorded within the previous three months was 1.8 percent, showing the economic growth nearly doubled.
However, that growth is not expected to continue. A high percentage of economists expect the growth to slow down in the ongoing quarter with the rate expected to be less than 2.5 percent in spite of the increased rate of employment.
Small pay increases and the rising prices of gas may force consumers to spend relatively less. Other contributing factors to the slowing of the economy are the recession expected in Europe and China’s slowing growth, as they are expected to drag on exports.
Never the less, growth is expected to pick up later in the year as consumers get more spending power due to the rise in job creation.
Jennifer expects the growth to rise to 2.9 percent within the last quarter of the year, up from the 2.2 percent recorded this quarter. She explained that people who had been unemployed for a relatively long time were not likely to spend everything they earned soon after getting hired. Some lag must be expected as they rebuild their savings and repay their debts.
Many businesses are becoming increasingly confident as they expect the economy to improve even more. As a result, they are ready to hire more workers to put them in a better position for growth.
For example, ancestry.com expects to hire 150 more employees this year to boost their present staff of about 1000. The Web site is dedicated to tracing and providing family histories. The company has benefited from a marked increase in paid memberships. Two years ago, the company had about one million subscribers but the number has risen to 1.7 million.