filings up slightly
The number of Americans seeking unemployment benefits rose just 1,000 last week to a seasonally adjusted 308,000, hovering near six-year lows. Companies are still cutting very few jobs, however the decline in layoffs has not been accompanied by a pickup in hiring.
The less volatile four-week average for applications fell to 305,000, the Labor Department said Thursday. That’s the lowest since May 2007, seven months before the recession began.
Weekly applications could increase next week because of the partial government shutdown. Defense contractors and other companies that do business with the government may temporarily lay off workers. Federal workers who are temporarily laid off may also file for benefits, though their numbers are reported separately and published a week later than the other applications.
Still, the broader trend has been encouraging. Applications, which are a proxy for layoffs, have fallen steadily in the past three months as many companies have stopped laying off workers. That suggests more employers are confident enough in the economy to maintain their existing staffs.
Steady declines in applications are typically followed by more hiring. But that hasn’t happened. Instead, job gains have slowed in recent months.
Growth at U.S. service companies slowed in September from an eight-year high in August, as sales fell sharply, new orders dipped and hiring weakened.
The Institute of Supply Management said Thursday that its service-sector index fell to 54.4 in September, down from 58.6 in August. August’s reading was the highest since December 2005. Any reading above 50 indicates expansion.
The sharp drop in sales suggests consumers and businesses pulled back on spending last month, which should keep growth weak. And the decline comes at a critical time when the government shutdown threatens to weigh on growth in the October-December quarter, if it goes beyond a week.
The services report measures growth in service industries, which cover 90 percent of the workforce, including retail, construction, health care and financial services.
Car fire dings
Tesla Motors stock
Shares of Tesla Motors fell another 5 percent Thursday as investors in the high-flying company assessed the fallout from a fire in one of its $70,000 electric cars.
The fire began in the car’s battery after the driver hit metal debris. Firefighters extinguished the flames and no one was hurt.
Tesla says it’s the first fire in one of its cars. Experts say electric car fires are rare, and consumers should still consider buying them.
But the sight of flames engulfing the front end of a Model S on the side of a highway in the Seattle-area has been a jolt to investors. Tesla has been a Wall Street darling this year, selling more cars than expected and posting its first-ever profit.