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Weekly Unemployment Applications Fall  10/27 08:10

   WASHINGTON (AP) -- Fewer Americans sought unemployment aid last week, a sign 
that businesses are holding onto their workers and hiring is likely solid.

   THE NUMBERS: Weekly applications for unemployment benefits fell 3,000 to 
258,000, the Labor Department said Thursday, not far from the 43-year low 
reached last month. Applications have been below 300,000 for 86 straight weeks, 
the longest such streak since 1970.

   About 2.04 million people are receiving unemployment aid, the government 
said, the fewest since June, 2000.

   THE TAKEAWAY: Applications are a proxy for layoffs, so the low level 
suggests companies are cutting few jobs. That typically means they are willing 
to add workers as well.

   Hiring has slowed a bit in the past few months, but is still strong enough 
to lower the unemployment rate over time. Employers added 156,000 jobs in 
September, a modest gain. The unemployment rate was 5 percent, up from 4.9 
percent the previous month. But the increase occurred mostly for a good reason: 
More Americans came off the sidelines and began looking for work.

   KEY DRIVERS: Growth has been sluggish this year, averaging just 1.1 percent 
at an annual pace in the first half. Still, many economists expect it will 
accelerate a bit in the July-September quarter to about a 2 percent to 2.5 
percent pace.

   Americans are buying new and existing homes at a steady pace and are 
expected to spend at a solid pace during the winter holiday shopping season.

   Many businesses have worked off excess supplies in their warehouses and on 
store shelves. That means they may step up orders in the coming months to 
rebuild their inventories.

   Manufacturing continues to struggle, however. Orders for long-lasting 
manufactured goods slipped 0.1 percent last month, the Commerce Department said 
in a separate report.


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