WASHINGTON (9/6/13)--Initial claims for U.S. unemployment benefits declined last week--hitting a five-and-a-half-year low--an indication the labor market is slowly healing as job layoffs continue to abate (MarketWatch, Bloomberg.com and Moody's Economy.com Sept. 5).
Claims fell 9,000--to 323,000--for the week ended Aug. 31, the lowest level since 2007, the Labor Department said Thursday.
Meanwhile, continuing claims for unemployment benefits dropped 43,000--to 2.951 million--for the week ended Aug. 24.
Because employers are slowing the pace of job cuts, the labor market is being readied for hiring increases to meet any growth in demand, with the effects of higher payroll taxes and federal budget cuts dissipating, Bloomberg said.
Rising personal incomes and employment growth will help uphold consumer spending--which constitutes 70% of the U.S. economy, Bloomberg added.
Although there has been substantial progress in claims reduction, more progress is needed with the hiring side of the equation, Yelena Shulyatyeva, an economist at BNP Paribas in New York, told Bloomberg.