WASHINGTON - The number of people applying for U.S. unemployment benefits fell last week, suggesting modest job growth after three months of weak hiring.
The Labor Department said Thursday that applications for weekly benefits dropped by 12,000 to a seasonally adjusted 377,000. That's down from an upwardly revised 389,000 the previous week. It was the first decline in five weeks.
The four-week average, a less volatile measure, rose by 1,750 to 377,500, the highest level in a month.
Applications are a measure of the pace of layoffs. When claims dip below 375,000, it typically suggests hiring is strong enough to reduce the unemployment rate. They have stabilized near that level this year after declining sharply last fall.
"Although the labour market appears to have stabilized, and is stronger than it was in 2011, it is not particularly robust," Steven A. Wood, chief economist at Insight Economics, wrote in a note to clients.
The government last week reported that the unemployment rate rose to 8.2 per cent in May from 8.1 per cent in April. Employers added 69,000 jobs, the fewest in a year.
Job growth averaged a decent 252,000 a month from December through February. But hiring has slowed to an average 96,000 a month since then.
The government also reported last week that the economy grew at a sluggish annual rate of 1.9 per cent the first three months of 2012, which is consistent with monthly job growth of around 90,000.
The economy is still struggling three years after the recession officially ended in June 2009. Wages haven't kept up with inflation, pinching consumer spending. State and local governments have continued to shed jobs.
The United States has regained less than 3.8 million, or 43 per cent, of the 8.8 million jobs lost during and immediately after the recession.
There have been some signs this week that hiring could improve.
A Labor Department report Wednesday suggested that companies may have to start hiring if business picks up. U.S. worker productivity fell by the largest amount in a year from January through March. The drop signals that companies are struggling to squeeze more out of their existing staffs.
And the Federal Reserve issued an update economic report Wednesday, saying that the economy grew modestly across most of the United States this spring. The Fed survey shows growth in each of its 12 bank districts from April 3 through May 25.