The Labor Department said Thursday that weekly applications for unemployment benefits rose 3,000 to 265,000. The four-week average, a less volatile measure, fell 4,250 to 279,500, the lowest level since May 2000.
The total number of people receiving benefits was 2.23 million, the lowest figure since November 2000. That figure has fallen by more than 20 per cent over the past 12 months. This suggests that employers are holding onto workers despite barely any economic growth in the first three months of the year.
Weekly applications are a proxy for layoffs. They have stayed below 300,000 for the past two months, which usually indicates additional hiring on the expectation of business improving.
Growth practically flat-lined in the first quarter, but employers appear to have only tapped the brakes on hiring so far.
The economy improved at a barely there 0.2 per cent annual rate in the first quarter of the year, the government said last week. This was a severe deceleration from the 3.6 per cent pace in the final six months of last year, although it corresponds with a similar slowdown at the start of 2014 caused by fierce winter storms. Between January and March, energy firms invested less in equipment and drilling, while consumer spending slowed.
The meagre growth trickled into weaker hiring in March. Employers added just 126,000 jobs that month, ending a yearlong streak of monthly gains above 200,000. The unemployment rate remained 5.5 per cent.
Still, the low levels of layoffs indicate "that report's weakness may have been a blip in an otherwise solid trend," said Derek Lindsey, an analyst at BNP Paribas.
Economists expect a rebound in the government's April jobs report to be released Friday. They anticipate that 222,500 workers were hired, causing the unemployment rate to slip to 5.4 per cent, according to FactSet.
But a private survey raised concerns that hiring might have struggled for a second straight month. Payroll processor ADP said that businesses added just 169,000 jobs in April, down from 175,000 in March.Suggest a correction