First-time jobless benefits hit 5-year low

Economists argue that the labor market is healthier when applications fall below 375,000, reflecting a slower pace of layoffs.

The report comes a day ahead of April’s job figures with economists forecasting an addition of about 160,000 last month, which would be nearly double of the 88,000 in March. The unemployment rate will probably remain steady at 7.6 percent. 

Still, economists predicted much better job creation in March and were disappointed by the report. 

Businesses have expressed concern about Washington’s ability to fend off economic headwinds such as the $85 billion in automatic spending cuts that went into effect on March 1. 

The cuts are expected to, and could already be weighing on jobs and economic growth, which the Federal Reserve suggested in a report on Wednesday. 

A private-sector jobs report on Wednesday from ADP showed the addition of only 119,000 jobs in April, a slower rate than expected and likely the first sign that fiscal policies have made employers cautious about hiring. 

Still, consumers also have managed to keep plugging along in their spending and confidence through the first several months of the year.