WASHINGTON (AP) — Declining applications for unemployment benefits have typically pointed to stronger hiring.
Not so much anymore.
Since the U.S. recession officially ended in June 2009, fewer layoffs have meant fewer people seeking unemployment aid. On Thursday, for example, the government said first-time applications for benefits hit a 4½-year low.
Yet job growth remains sluggish. That was evident last week in the government's jobs report for September. A survey of employers showed that they added a modest 114,000 jobs last month.
And the unemployment rate, based on a separate survey of households, did sink in August to 7.8 percent from 8.1 percent.
If fewer people are being laid off, why aren't employers hiring more?
Blame the slow pace of the U.S. economy, damage from Europe's economic crisis and fear that tax increases and spending cuts could trigger another U.S. recession next year.
Many companies have said they lack confidence that the U.S. economy will strengthen enough in coming months to justify hiring now.
"The relationship between claims and jobs has been less strong during this recovery than in past post-war recoveries," said Drew Matus, an economist at UBS. "There's a hiring problem out there, as opposed to a layoff problem."
Even last week's sharp drop in people seeking unemployment benefits came with a cautionary note.
Applications fell 30,000 to 339,000, the fewest since February 2008. And the four-week average, a less volatile gauge, reached a six-month low. But economists noted that much of last week's drop was due to seasonal volatility in the data.
A Labor Department spokesman said one large state accounted for much of the drop in applications for unemployment aid. The spokesman didn't identify the state, but several economists speculated that it was California.
The long-term trend in applications for unemployment benefits has been steadily down, though it has leveled off since spring.
When the economic recovery officially began in June 2009, an average of roughly 600,000 people were filing first-time claims for benefits each week. For nearly a year, that figure has remained consistently below 400,000.
But the decline hasn't correlated with robust job growth, as it did in past economic recoveries. Many economists say they're not ready to predict a strengthening job market.
"We're going to wait for some corroborating data," said Dan Greenhaus, chief market strategist at BTIG LLC.
The number of people who continue to receive unemployment benefits has fallen. Slightly more than 5 million Americans received benefits in the week that ended Sept. 22, the latest period for which figures are available. That's down about 44,000 from the previous week.
But some people who no longer receive aid have likely used up all the benefits available to them.
The 114,000 jobs employers added in September are roughly enough to keep pace with population growth. They aren't enough, though, to provide work for the more than 12 million unemployed Americans.
And most of the job increases last month came from those who had to settle for part-time work: In September, 582,000 more people than in August said they were working part-time but wanted full-time jobs.
The economy did gain an average of 146,000 jobs a month in the July-September quarter — more than twice the monthly pace in the April-June quarter.
Still, another government report this week added to signs that hiring will likely remain modest: Employers advertised slightly fewer open jobs in August than in July. It was the second straight monthly drop. And the number of posted openings was the fewest since April.
A major problem is the U.S. economy isn't growing fast enough to generate significant hiring. Economic growth slowed to a tepid annual rate of 1.3 percent in the April-June quarter. That was down from a 2 percent annual rate in the previous quarter.
And most economists foresee growth staying at or below 2 percent in the second half of the year.