Applications for unemployment benefits drop, matching lowest level since 1973

Associated Press

WASHINGTON

The number of Americans seeking unemployment aid fell last week, matching the lowest level in 42 years, strong evidence that employers remain confident enough in the economy to hold onto their staffs.

The Labor Department said Thursday that weekly applications for unemployment benefits fell 7,000 to a seasonally adjusted 255,000. Applications last touched that level in July, but before that, hadn’t been so low since November 1973.

The four-week average of applications, a less-volatile measure, dropped to 265,000, the lowest since December 1973.

There are signs the economy has slowed in recent weeks, in part because the strong dollar has cut into exports, and overall hiring has weakened. Americans also have been reluctant to spend. But faltering growth has not yet led businesses to cut jobs.

The weekly applications are a proxy for layoffs and have been below 300,000 since March, a historically low level that typically points to solid hiring.

Yet hiring has stumbled in the past two months, raising worries that employers have turned cautious about adding jobs. The U.S. economy gained just 142,000 jobs in September and only 136,000 in August, below the average of nearly 229,000 in the previous 12 months.

Industries that have been directly affected by slower growth overseas and by the stronger dollar, such as manufacturing, have been cutting jobs.

The dollar has risen about 13 percent in value against foreign currencies in the past 12 months.

That makes U.S. exports more expensive in international markets while lowering the price for competing imports.

Growth also has slowed or come to a halt in large economies such as China, Canada, Brazil and Europe.

Falling oil prices also have caused drilling companies to cut back on their orders for steel pipe and other equipment, another blow to factories.

The economy is expected to expand just 1 percent to 1.5 percent at an annual rate in the third quarter, a sharp drop back after 3.9 percent growth in the second quarter.