Applications for U.S. unemployment aid slip to a low 266,000

WASHINGTON -- Slightly fewer people sought U.S. unemployment benefits last week, a sign that layoffs are low and employers are probably adding new jobs.

The Labor Department says that weekly unemployment aid applications declined 1,000 to a seasonally adjusted 266,000. The four-week average, a less volatile measure, rose 3,000 to 262,750.

"The U.S. economy should be close to full employment by the end of this year," Gus Faucher, deputy chief economist at PNC Financial Services, wrote in a note to clients. "The tighter job market is pushing wages higher, in turn supporting growth in consumer spending."

Applications are a proxy for layoffs and are at historically low levels. That suggests employers are confident enough in the economy to hold onto their staffs. At the same time, hiring has picked up: Employers added the most jobs in eight months in June and hiring was also healthy in July. The unemployment rate was 4.9 percent in both months.

Weekly applications have been below 300,000 for 75 straight weeks, the longest such stretch since 1970.

"Claims have been below 300,000 for 75 consecutive weeks, the longest-such stretch since 1973, when the labor force was much smaller," Faucher noted.

Thursday's weekly data come a day after the Labor Department reported that U.S. employers advertised more openings and hired more people in June, with the number of job openings up a modest 2 percent to 5.6 million from 5.5 million in May.