U.S. unemployment applications drop, but remain high

Fewer Americans applied for unemployment benefits last week, though applications remain above levels consistent with a healthy economy. The Labor Department says unemployment benefit applications fell 16,000 to a seasonally adjusted 414,000, the second drop in three weeks. That’s a positive sign that layoffs are slowing. Still, applications have been above 400,000 for 10 straight weeks, evidence that the job market is weak compared to earlier this year. Applications had fallen in February to 375,000, a level that signals sustainable job growth. They stayed below 400,000 for seven of nine weeks. But applications surged in April to 478,000—an eight-month high—and they have declined slowly since then. The four-week average, a less volatile measure, was unchanged. The elevated level of applications suggests that companies pulled back on hiring in the face of higher gas and food prices, which have cut into consumer spending. Hiring has slowed sharply since applications rose.