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Jobless claims at a 5-year low

Posted on August 1st, 2013 Read time: 1 minutes

According to a recent release from the Labor Department, the number of people filing new unemployment claims in the U.S. is the lowest it has been since January 2008. This news suggests the labor market is doing well – according to David Sloan, senior economist at 4Cast in New York, it may well be increasing, Reuters reported. Prior to the release of the report, economists had expected first-time claims to rise. This is good news for the U.S. economy, though there is no sign the Federal Reserve intends to decrease its monthly bond purchases.

The jobless rate in the U.S. is at 7.5 percent, and the rate of layoffs is decreasing. A study by the outplacement firm Challenger, Gray & Christmas showed the total planned layoffs in U.S. firms dropped in July by 4.2 percent.

Part of this growth in the labor market can be attributed to contingent employment. In an improving economy, it is often the case that firms will choose to hire temporary workers before making the commitment to add employees to the payroll permanently. As the Affordable Care Act looms, it is also common for businesses to employ contract workers to avoid possible hassles under the new law.

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