The news: The outlook for the U.S. job market brightened after the Labor Department showed weekly applications for unemployment benefits fell 27,000 to a seasonally adjusted 341,000. That’s the lowest level in five years not counting a few weeks recently that were affected by seasonal distortions.
What is means: Falling applications signal fewer layoffs. More hiring usually follows, but not always. Many companies may be more cautious about hiring now that a 2 percentage point increase in Social Security taxes is cutting consumers’ take-home pay. That could slow job growth, which is needed to bring down the still-high unemployment rate.
What the economists are saying: Economists were encouraged by the decline but want to see the progress sustained and more jobs created. Since the recession ended in June 2009, the job market has shown brief bursts of improvement in the winter months only to falter in the spring. Forecast: Tentatively positive
The Associated Press