The number of Americans applying for unemployment aid has reached a 15-year low, according to official statements. The Labor Department reported that weekly applications for unemployment benefits dropped by 34,000 – the lowest level since April 2000. The four-week average showed a similar dip, with 1,250 less applications. The number of people receiving aid also declined, with only 2.25 million people being compensated. This is the fewest since December 2000.
Unemployment aid applications have been shown by several studies to be related to layoffs. When companies recycle their employees – usually a sign of economic turmoil (either on a global or local scale) – the number of locals seeking aid increases. The sharp decline in applications has given many financial experts renewed optimism for the local economy. Many employers are holding on to their workers, despite a currently struggling job market.
National reports revealed that the economy rose by a mere 0.2 percent during the first quarter, down from 3.6 percent during the second half of last year. However, if employers estimated a longer-lasting slump, they would have begun downsizing. The trend, then, of retaining employees suggests that the weak rise during the first part of the year may have just been a bump on the road.
Economists attribute the less-than-spectacular growth to temporary factors such as the West Coast port strike and harsh winter weather. These factors forced consumers to cut back on their spending and businesses to reduce their investments on new oil and gas drilling for cheaper oil sources. The dollar was also dependent on exports, which widened the trade gap. Hiring was also weak during the first part of the year, with only 126,000 new jobs during March, the fewest in 15 months. This occurred despite the unemployment rate remaining at 5.5 percent.
Analysts estimate that growth will rebound during the second quarter to about 2.5 percent.