WASHINGTON (MarketWatch) â€” Applications for unemployment benefits rose slightly last week, the government reported Thursday, but the number of people seeking compensation appears to have settled in a range that suggests little change in the rate of U.S. job growth.
Initial claims climbed by 8,000 to a seasonally adjusted 365,000 in the week ended July 28, the Labor Department said. Economists surveyed by MarketWatch had projected claims would rise to 370,000.
The level of claims â€” a rough gauge of whether layoffs are rising or falling â€” have bounced up and down in July because of temporary fluctuations in the number of auto workers.
Car makers usually shut down plants to retool at the start of July and bring workers back later in the month. Government economists have a hard time accounting for these large swings in employment.
Yet the process of temporary auto layoffs usually fades by early August and claims become less volatile. A more stable barometer of labor-market trends, the four-week claims average, dropped 2,750 to 365,500. Thatâ€™s the lowest level since late March, an indication that claims are stabilizing.
Weekly applications for benefits have ranged from 352,000 to 392,000, in the first seven months of 2012. That level of claims typically correlates with modest increase in monthly job growth.
Yet just like the claims data, the monthly employment report has been erratic. The U.S. added a healthy average of 225,000 jobs in the first three months of the year, but job growth has dwindled to a 75,000 pace in the second quarter as the economy slowed.
The latest employment report for July will be released Friday. Economists surveyed by MarketWatch forecast that the U.S. added 100,000 jobs last month, up from an initial estimate of 80,000 in June.
At that level, monthly employment growth is too slow to put much of a dent in the nationâ€™s 8.2% unemployment rate. The economy needs to add upward of 250,000 jobs a month over several years to drive down unemployment to precession levels.
A much faster pace of hiring, however, doesnâ€™t appear likely anytime soon. Consumers has reduced spending, businesses are investing at a slower pace and governments continue to cut back, triggering another slowdown in the U.S. economy.
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