On Thursday, the Labor Department said that weekly applications for unemployment benefits the previous week dropped 34,000 to 262,000. That’s the lowest level since April 2000. The four-week average, a less-volatile measure, dipped 1,250 to 283,750, near a 15-year low.
Applications are a proxy for layoffs, so the significant fall indicates that – despite a sharp slowdown in economic growth – employers remain confident enough in the economy to hold onto their workers.
The economy expanded just 0.2 percent at an annual rate in the January-March quarter, down from the 3.6 percent pace in the second half of last year. Fewer layoffs, however, suggests the growth slowdown may be temporary.
If employers anticipated a longer-lasting slump, it is likely that job cuts and applications for unemployment benefits would rise.
“The trend in claims, below the pre-recession trough, continues to impress,” Derek Lindsey, an analyst at BNP Paribas, said. It suggests that weak hiring in March “may have been a blip in an otherwise solid trend.”
The number of people receiving aid also fell, dropping 74,000 to 2.25 million. That is the fewest since December 2000.
Most economists blame temporary factors, such as a West Coast port strike and harsh winter weather, for the first quarter’s slow growth. Consumers cut back on spending and businesses sharply reduced their investment in new oil and gas drilling, in response to cheaper oil. Some also blame a strong dollar for weighing on exports and dragging down growth.
Yet analysts expect that growth will rebound in the April-June quarter to about 2.5 percent.
In addition, hiring was weak in March. Employers added just 126,000 jobs that month, the fewest in 15 months and snapping a yearlong streak of monthly gains above 200,000. The unemployment rate remained at 5.5 percent.
Despite those stumbles, unemployment-benefit applications are at rock bottom. For those with jobs, the chances of getting laid off are very low.