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Fewest Americans Since Feb. 2008 Seek Jobless Aid

CHRISTOPHER S. RUGABER

WASHINGTON (AP) â¿¿ Declining applications for unemployment benefits have typically pointed to stronger hiring.

Not so much anymore.

Since the U.S. recession officially ended in June 2009, fewer layoffs have meant fewer people seeking unemployment aid. On Thursday, for example, the government said first-time applications for benefits hit a 4½-year low.

Yet job growth remains sluggish. That was evident last week in the government's jobs report for September. A survey of employers showed that they added a modest 114,000 jobs last month.

And the unemployment rate, based on a separate survey of households, did sink in August to 7.8 percent from 8.1 percent.

If fewer people are being laid off, why aren't employers hiring more?

Blame the slow pace of the U.S. economy, damage from Europe's economic crisis and fear that tax increases and spending cuts could trigger another U.S. recession next year.

Many companies have said they lack confidence that the U.S. economy will strengthen enough in coming months to justify hiring now.

"The relationship between claims and jobs has been less strong during this recovery than in past post-war recoveries," said Drew Matus, an economist at UBS. "There's a hiring problem out there, as opposed to a layoff problem."

Even last week's sharp drop in people seeking unemployment benefits came with a cautionary note.

Applications fell 30,000 to 339,000, the fewest since February 2008. And the four-week average, a less volatile gauge, reached a six-month low. But economists noted that much of last week's drop was due to seasonal volatility in the data.

A Labor Department spokesman said one large state accounted for much of the drop in applications for unemployment aid. The spokesman didn't identify the state, but several economists speculated that it was California.

The long-term trend in applications for unemployment benefits has been steadily down, though it has leveled off since spring.

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