US unemployment benefit applications rise to 309K

The Labor Department says the less volatile four-week average fell 7,000 to 314,750, the lowest in nearly six years.

Applications plummeted two weeks ago when California and Nevada were unable to report all their data because of computer upgrades in both states.

A government spokesman says those states reported all the applications that came in last week. But backlogged data from two weeks ago may elevate the figures in the coming weeks, he said.

The broader trend in applications has been favorable, signaling fewer layoffs. The four-week average fell 6 percent in the two months before the computer upgrades distorted the figures.

While layoffs are down, companies have yet to rapidly step up hiring. Employers have added an average of just 155,000 jobs a month since April. That's down from an average of 205,000 for the first four months of the year.

That's a big reason the Federal Reserve on Wednesday held off slowing its $85-billion-a-month in bond buying. Those purchases are intended to keep mortgage and other longer-term interest rates low and encourage more borrowing, spending and growth.

The economy grew at a modest 2.5 percent annual rate in the April-June quarter. That's too slow to generate hiring strong enough to rapidly lower the unemployment rate, which is a still-high 7.3 percent four years after the Great Recession ended.

And economists forecast that growth has slowed to an annual rate of 2 percent or less in the current July-September quarter. Consumers have grown more cautious about spending, while higher interest rates have threatened to slow the housing recovery.