By CHRISTOPHER S. RUGABER
WASHINGTON (AP) â¿¿ The number of Americans seeking unemployment benefits fell last week to a seasonally adjusted 339,000, the second-fewest in more than five years. The drop suggests that layoffs have declined and that job growth may pick up from last month's sluggish pace.
Applications for benefits dropped 16,000, the Labor Department said Thursday. The four-week average declined 4,500 to 357,500.
Applications are a proxy for layoffs. When they decline, it signals that companies are cutting fewer jobs.
Still, layoffs are only half the equation: Businesses also need to be confident enough in the economy to step up hiring. Many companies have been advertising more jobs but have been slow to fill them. Job openings jumped 11 percent during the 12 months that ended in February, but the number of people hired declined, according to a Labor Department report this month.
The still-uncertain economy has made many companies reluctant to hire. Some employers appear to be holding out for perfect job candidates. In particular, companies say they can't find enough qualified candidates for high-skilled manufacturing and engineering jobs.
Other employers may not be offering high enough pay to attract the candidates they need.
Still, most economists were encouraged by Thursday's report on unemployment benefits, though some cautioned against reading too much into one week's data.
"The downtrend in unemployment remains on track," said Jim O'Sullivan, chief U.S. economist at High Frequency Economics.
In March, employers added only 88,000 jobs. That was a sharp drop from the previous four months, when hiring averaged 220,000 per month.
The unemployment rate fell to a four-year low of 7.6 percent from 7.7 percent in February. But the drop occurred because more people out of work stopped looking for jobs. The government doesn't count people as unemployed unless they are actively looking for work.