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Unemployment Applications Drop to Lowest Level Since May

Posted: 11:05 AM Jul 5, 2012
Reporter: Associated Press

WASHINGTON (AP) - The number of people seeking unemployment aid last week fell to its lowest level since mid-May, suggesting layoffs are easing and hiring could pick up.

The Labor Department said Thursday that weekly unemployment benefit applications dropped by 14,000 to a seasonally adjusted 374,000, the fewest since the week of May 19.

The four-week average, which smooths out weekly fluctuations, dipped by 1,500 to 385,750.

Weekly benefit applications serve as a measure of the pace of layoffs. When applications consistently fall below 375,000, it generally suggests hiring is strong enough to reduce the unemployment rate.

Unemployment benefit applications declined steadily over the winter, coinciding with a burst of hiring. But they rose in the spring and were stuck near 390,000 for five weeks. During that time, the job market slumped.

Employers added an average of only 73,000 jobs per month in April and May. That's much lower than the average of 226,000 added in the first three months of the year.

The government will release the June jobs report Friday.