The number of people seeking U.S. unemployment benefits dropped by 8,000 last week to a seasonally adjusted 287,000, as the total number of beneficiaries dropped to its lowest level in more than eight years.
The four-week average of applications, a less-volatile measure, fell 4,250 to 294,750, the Labor Department said Thursday. Overall, 2.3 million people are receiving jobless aid. That’s the fewest since June 2006, which predates the start of the Great Recession by 18 months.
“The numbers are so low now that it seems just a matter of time before we see a run of big gains” in monthly hiring figures, said Ian Shepherdson, chief economist at Pantheon Macroeconomics.
Applications are a proxy for layoffs. The recent decline suggests that employers are keeping their workers, likely because they expect continued economic growth and may be contemplating more hires.
The steady decline in people applying for benefits began at the end of April, after brutal winter weather temporarily caused a halt to economic growth.
The drop in applications has corresponded with stronger job gains for much of 2014. Americans are also more confident in the economy and thus spending more. Adjusted for inflation, consumer spending increased in August at the fastest pace in six months.
Employers added 142,000 jobs in August, according to the Labor Department, down from an average of 212,000 in the preceding 12 months. It was the end of a six-month streak of monthly job gains in excess of 200,000. The unemployment rate fell to 6.1 percent from 6.2 percent, but only because some of those out of work gave up looking. The government doesn’t count people as unemployed unless they are actively searching.
Based off the four-week average for jobless claims, monthly job growth should be close to 250,000, said Joshua Shapiro, chief U.S. economist at the consultancy MFR.
Economists say the government’s September jobs data, being released Friday, will show a rebound from the August figures. Their consensus forecast is that employers added 215,000 jobs last month.
In a separate report, released Wednesday, payroll processer ADP said that private employers added 213,000 jobs in September.