More Americans applied for unemployment benefits last week. The level was still consistent with steady hiring even if weekly applications increased 10,000 last week to a seasonally adjusted 354,000. The four week average advanced 6,750 to 347,250, which was the third gain in a row. The average dropped to a five year low earlier this month.
South Carolina is the state with the largest increase. The number of applications for unemployment benefits went up 1,263 and was attributed to layoffs in manufacturing sector.
Tennessee unemployment benefit applications increased 1,191. This was due to layoffs in support and administrative services, trade contractors, and restaurants.
California got the most decreases last week. The number of unemployment benefit applications declined 16,334 due to fewer layoffs in the service industry.
Georgia dropped 1,802 unemployment benefit applications. This was attributed to fewer firings in construction, manufacturing, and administrative and support services.
Illinois got a decrease of 1,198. The state didn’t give any reason for the decline.
Economists are awaiting the release of the May unemployment report. Investors, business leaders and policymakers are looking into the US recovery, which has been modest but continuing. IF a decline is seen in the current 7.5 percent jobless rate, analysts will look into the numbers to find out if the improvement showed more hiring or less labor force participation.
If a gain is seen, there will be a hunt to find out the cause. Some of the reasons include the large cash hoards instead of hiring new workers and the effect of both the sequester and the payroll tax increase.
On Thursday, the business world will focus on the head of the euro zone central bank, Mario Draghi, as he reveals whether the European Central Bank will slash its main lending rate for the second time in two months or keep the rate at 0.5 percent. Most analysts expect it to be the later.
Leave a Reply