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As per the recent reports revealed, fewer people have applied for the unemployment benefits in the U.S. last week, which is a sign that the job market continues to improve.
“ The weekly applications fell 10,000 to a seasonally adjusted 278,000. The four-week average, a less volatile measure, declined 2,250 to 279,000, the lowest level in more than 14 years,” Labor Department said Thursday.
These applications are a substitute for layoffs and have fallen 18.5% in the past year, which implies rising economic confidence among businesses, causing them to keep their workers and potentially look to hire more employees.
Jesse Hurwitz, a Barclays research economist, wrote via e-mailed analysis, “The Labor Department noted no special factors in this week’s report. The continued downward trend for initial and continuing claims is consistent with solid labor market improvement; though, given that this week’s report corresponds to the period after the survey week for the October payrolls report, our forecast for nonfarm payroll gains of 225,000 in tomorrow’s report remains unchanged.”
The turn down in applications is overlapping with stronger hiring this year.
In 2014, employers have added an average of 227,000 jobs a month, up from an average of 194,000 last year. Over the past year, employers have added 2.64 million jobs, the best showing since April 2006. The unemployment rate has fallen to 5.9%, a six-year low.
As per the Friday’s report, 230,000 jobs were added in the month of October, economists say. The rate of unemployment is projected to hold stable.
Payroll Processer ADP said Wednesday, U.S. companies added 230,000 jobs in October. The result was the highest in 4 months and an indication that businesses are still willing to hire in spite of slow growth signs overseas. Normally, job gains above 200,000 are enough to lower the unemployment rate.
Still, the improvement in hiring has yet to translate into higher wages. Average wages have grown slightly faster than inflation. According to Sentier Research Median, annual household income at $54,045 remains 4.6% lower than incomes when the recession began in late 2007.
The government’s job report on Friday revealed a healthy pace of hiring. The ADP numbers cover only private businesses and sometimes diverge from the government’s more comprehensive report.
According to a survey by FactSet, economists predict that the government’s report will show that all employers, including government agencies, also added 230,000 jobs in October.
The job gains in the ADP report were broad-based: Construction firms added a solid 28,000 jobs last month, while manufacturing gained 15,000 positions. Professional and business services, which include mostly higher-paying positions such as accountants and engineers, gained 53,000.
Regardless of some hiccup in economic growth, hiring has been strong this year. In 2014, employers have added an average of 227,000 jobs a month that puts this year on pace to be the strongest year for job creation since 1999.