"In terms of job growth, we have seen a disconnect between the level of hiring and firing,"
- Bricklin Dwyer, Economist at BNP Paribas
The number of Americans, who applied for jobless benefits over the past month declined to the lowest level in almost six years, adding to signs of fewer layoffs. According to the Labour Department, the average number of people, who applied for benefits over the past four weeks, declined 6,250 to 335,500, the lowest level since November 2007. Nevertheless, the number of first-time applicants did increase slightly last week to a seasonally adjusted 330,00, being just 5,000 higher than the five-and-a-half year low reached two weeks ago.
The drop in worker dismissals explains why job growth has risen this year to an average of 192,000 net jobs a month, while U.S. economic growth remains sluggish. It might also be a harbinger to a increase in hiring, which will sustain household spending and urge the expansion for the rest of 2013. The Labor Department said that layoffs averaged 1.6 million a month through June, compared to a monthly average of almost 1.8 million in the pre-recession year 2006.
Despite the decline in unemployment applications, net job growth slowed in July, as employers created 162,000 net jobs, the fewest in four months. Although the jobless rate fell from 7.6% in June to 7.4%, the lowest level in more than four years last month, it still remains well above the 5%-6% associated with a normal economy.
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