The number of people receiving unemployment benefits reached a four-year low last week, fresh evidence of a strengthening economy.
The number of laid-off workers receiving jobless benefits averaged 2.58 million over the four weeks ending last week, the lowest four-week average since March 2001, the Labor Department reported Thursday.
For just last week, the number of newly laid off workers applying for benefits fell by a better-than-expected 4,000 from the previous week to 315,000, the lowest level for new claims since the first week in August.
Analysts said both the drop in total benefits being paid and the decline in new benefit applications pointed to an economy that was continuing to create jobs.
“The general message from the claims numbers as well as just about every other indicator we have seen over the past couple of months is that the economy is still growing at a very nice clip,” said Nariman Behravesh, chief economist at Global Insight, an economic forecasting firm in Lexington, Mass.
On Wall Street, the Dow Jones industrial average managed to eke out a small gain even though oil prices closed at a record level for a second straight day, rising by 17 cents to $67.49 per barrel. The Dow Jones industrial average rose 15.76 points to close at 10,450.63.
So far this year, a strong economy has generated an average of 191,000 new jobs per month, better than last year’s average of 183,000. Employers created 207,000 jobs in July, which helped to keep the unemployment rate at a low level of 5 percent.
The overall economy, which grew at an annual rate of 3.4 percent in the spring, is powering ahead at an even faster pace above 4 percent in the current July-September quarter, many economists believe, and they expect this strength will add to job growth.
Behravesh predicted strong economic growth will keep monthly job creation between 150,000 and 200,000 and help to send the unemployment rate down to 4.7 percent over the next year.
Forecasters said the labor market will continue to improve as long as soaring energy costs don’t jolt business and consumer confidence and cause cutbacks in spending.
“So far, the surge in oil prices has yet to do any significant damage to the broader economy,” said Mark Zandi, chief economist at Economy.com, another forecasting firm. “We may see some softening in the consumer spending numbers soon, but unless that translates into a weaker job market, the economy should be able to weather these higher energy prices.”
So far, soaring energy prices have not led to a broadbased rise in inflation. This has allowed the Federal Reserve to continue raising interest rates at a gradual pace to make sure inflation does not get out of control.
The decline in the number of people receiving benefits to a four-week average of 2.58 million represented an improvement of 684,000 from the 3.26 million people drawing jobless benefits at the beginning of 2004.