This Day On The Street
Continue to site
ADVERTISEMENT
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here

As Layoffs Keep Dropping, Hopes Rise For Job Gains

By CHRISTOPHER S. RUGABER

WASHINGTON (AP) â¿¿ Employers are laying off fewer workers, a trend that normally suggests hiring is picking up. The January jobs report next week will show whether employers have begun to hire more freely or are still waiting for the economy to strengthen.

The number of people seeking unemployment aid has reached a five-year low. Some employers, such as health care companies, restaurants and retailers, are hiring steadily. Yet overall job growth remains modest. And the unemployment rate is the same painful 7.8 percent it was when Barack Obama became president four years ago.

The economy isn't growing fast enough to accelerate hiring. Flat pay and high unemployment are holding back consumer spending, which rose at a meager annual rate of 1.6 percent in the July-September quarter.

The economy expanded at a 3.1 percent annual pace in the same period, partly because companies stockpiled more goods, which boosts production. Most economists think growth dipped below a 2 percent rate in the October-December quarter because consumer demand remains tepid.

Another factor has been uncertainty about federal spending and budget deficits. Most companies don't seem worried enough to cut jobs. But many may not boost hiring until further progress on the budget is achieved. This month, Congress avoided the "fiscal cliff" in part by postponing automatic spending cuts. And this week a deadline for raising the government's borrowing cap was put off for three months.

Significant hiring gains are "unlikely ... when there remains so much political uncertainty," said Paul Dales, an economist at Capital Economics.

First-time applications for unemployment benefits dropped 5,000 last week to a seasonally adjusted 330,000, the government said Thursday. That's the fewest since January 2008. The four-week average, a less volatile measure, also fell to nearly a five-year low.

Applications are a proxy for layoffs. They fluctuated between 360,000 and 390,000 for most of last year. At the same time, employers have added an average of 153,000 jobs a month.

1 of 3

Check Out Our Best Services for Investors

Action Alerts PLUS

Portfolio Manager Jim Cramer and Director of Research Jack Mohr reveal their investment tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
Quant Ratings

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
Stocks Under $10

David Peltier uncovers low dollar stocks with serious upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
14-Days Free
Only $9.95
14-Days Free
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!
SYM TRADE IT LAST %CHG

Markets

DOW 17,826.30 -279.47 -1.54%
S&P 500 2,081.18 -23.81 -1.13%
NASDAQ 4,931.8150 -75.9760 -1.52%

Partners Compare Online Brokers

Free Reports

Top Rated Stocks Top Rated Funds Top Rated ETFs