UI applications down; economy continues growth spurt; banks report record earnings

WASHINGTON (AP) -- The number of Americans seeking unemployment insurance (UI) benefits remained near the lowest level in more than five years last week, a sign that companies are cutting few jobs.

First-time applications for benefits fell 6,000 to a seasonally adjusted 331,000, the Labor Department said Thursday. The four week average, a less volatile measure, inched up 750 to 331,250 after falling to its lowest level since November 2007 the previous week.

Applications for unemployment benefits reflect layoffs. At the depths of the recession in March 2009, they numbered 670,000. The average has fallen 10 percent this year.

All told, nearly 4.5 million people received unemployment benefits in the week that ended Aug. 10, the latest period for which figures are available. That's about 30,000 more than in the previous week.

The figures "signal no let-up from the recent pace in employment growth, which has been strong enough to keep unemployment trending down," said Jim O'Sullivan, an economist at High Frequency Economics. "If anything, claims are suggesting further acceleration."

Though employers are cutting few jobs, most have yet to start hiring aggressively. Fewer layoffs can increase net job gains, even if hiring doesn't rise much.

GROWTH IN THE ECONOMY

The U.S. economy grew at a 2.5 percent annual rate from April through June, much faster than previously estimated. The steep revision was largely because U.S. companies exported more goods and imports declined.

The Commerce Department said second-quarter growth was sharply higher than the initial 1.7 percent rate it reported last month. And the growth this spring was more than double the 1.1 percent rate from January through March.

The improvement in the trade deficit helped offset a weaker government spending.

BANKS' EARNINGS

U.S. banks earned more from April through June than during any quarter on record, aided by a steep drop in losses from bad loans.

The Federal Deposit Insurance Corp. says the banking industry earned $42.2 billion in the second quarter, up 23 percent from the second quarter of 2012.

Banks' losses on loans tumbled 30.7 percent from a year earlier to $14.2 billion, the lowest in six years. And bank lending increased 1 percent from the first quarter. Greater lending helps boost consumer and business spending, leading to more jobs and faster economic growth.

Still, the report shows that the largest banks continue to drive the industry's profits while smaller institutions have struggled.