WASHINGTON (AP) -- Fewer people applied for unemployment benefits last week, resuming a downward trend that signals stronger job growth ahead.
Applications for unemployment benefits fell to a seasonally adjusted 403,000 in the week ending April 16, the Labor Department said Thursday. The decline partially reversed a jump in applications from the previous week, which economists said was largely the result of a seasonal quirk.
The four-week average rose for the second straight week to 399,000. Still, the broader trend in unemployment applications suggests employers are stepping up hiring.
"The pace of layoffs has slowed over the past 6 months and hiring is picking up," Steven Wood, chief economist at Insight Economics, said in a note to clients. Wood noted that applications have averaged 396,000 over the past 11 weeks, much lower than last year's average of 459,000.
Applications are nearing the 375,000 level that is typically consistent with sustainable job growth. Many economists are expecting the April employment report to show a third straight month of solid private-sector job growth, even with the recent bump in unemployment applications.
Joseph LaVorgna, chief U.S. economist at Deutsche Bank, said businesses should add about 225,000 net new jobs this month. Companies created more than 200,000 jobs in both March and February -- the fastest two-month hiring spree in five years. The unemployment rate fell last month to a two-year low of 8.8 percent, and has fallen by a full percentage point since November.
Separately, a private trade group said U.S. economic growth is on pace to strengthen by summer. But the Conference Board cautioned that concerns over rising gas and food prices could drag on the expansion. The trade group said its index of leading economic indicators, which measures future economic activity, increased for nine straight months.
Economists said the jump in unemployment applications two weeks ago was influenced to some degree by a seasonal quirk that is difficult to adjust for at the start of each quarter. Many workers delay filing their applications until the new quarter begins, if that means they will receive a higher level of benefits.
"Normally, most of any upward effect from this factor is reversed within a couple of weeks," said Joshua Shapiro, chief U.S. economist at MFR, Inc., in a note to clients.
The rise could also be partly due to disruptions in the U.S. auto industry stemming from the earthquake and tsunami in Japan, some economists said. Several states reported layoffs had risen in the auto and manufacturing industries. Toyota Motor Co., Nissan and Ford Motor Co., have said in recent weeks that they are slowing production this month because they can't obtain enough auto parts, many of which are imported from Japan.
Daniel Silver, an economist at JPMorgan Chase, estimated the shutdowns affected about 5,000 auto workers last week, compared to 10,000 the previous week.
Finally, California reported that applications jumped by more than 25,000 two weeks ago, because state officials cleared a backlog of claims that had built up the previous week, when California government offices closed for Cesar Chavez day.
The total number of people receiving unemployment benefits ticked down to 3.7 million. But that doesn't include millions of the unemployed who are getting benefits under emergency programs enacted by Congress during the recession. Including those programs, 8.3 million people received unemployment benefits during the week ending April 2, the latest data available. That's a drop of more than 200,000 from the previous week.
Part of that decline is because many of the unemployed are using up all their unemployment benefits before finding work. But some are likely getting new jobs.
Many companies are adding new workers. McDonald's Corp. held its first National Hiring Day on Tuesday, when it planned to hire 50,000 new workers. That would increase its work force by 7 percent. Electronics store hhgregg Inc. and retailer Kohl's Corp. have also announced plans in recent weeks to increase hiring.
AP Business Writer Tali Arbel contributed to this report from New York.
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