WASHINGTON (8/23/13)--Initial claims for U.S. unemployment benefits rose last week, but fell to a five-year low for the month ended Aug. 17, the Labor Department said Thursday.
Initial claims, a proxy for layoffs, increased 13,000--to a seasonally adjusted 336,000--for the week ended Aug. 17. However, claims in the month ended Aug. 17 dropped to 330,500 a week on average--the lowest amount since November 2007, said the Labor Department (Bloomberg.com, The Wall Street Journal, The New York Times and Moody's Economy.com Aug. 22).
Job cuts are diminishing because employers are retaining employees to meet sales demand, which could be a forerunner to larger payroll gains once the effects of higher payroll taxes and federal budget cuts wane in the second half of the year, Bloomberg said.
Employment growth combined with escalating incomes will help bolster consumer confidence and spending--which comprises roughly 70% of the U.S. economy, Bloomberg added.
Meanwhile, continuing claims for unemployment benefits rose 29,000--to three million in the week ended Aug. 10.