Evidence emerged Thursday that the economy should thaw once the weather does: 323,000 people applied for unemployment benefits last week, the Labor Department said. That might sound like a lot. But it's no more than the number who typically sought benefits before the Great Recession erupted at the end of 2007. Applications for benefits essentially reflect layoffs. And their low current levels suggest that companies foresee stronger consumer demand ahead, because layoffs would rise if employers expected business to weaken.
It's heartening when few people are being laid off. But the other side of the equation is actual hiring. And employers haven't been filling many jobs. The nation's monthly job growth averaged a seasonally adjusted 94,000 in December and January. That was far below last year's average monthly gain of 194,000. A third straight tepid month would be deflating. For February, economists predict that 145,000 jobs were added, according to a survey by FactSet.
Still, the economy has endured cold streaks before during the recovery. It averaged fewer than 71,000 added jobs a month between December 2010 and January 2011. It averaged 99,000 for two months in mid-2012. The question is whether job growth for the rest of 2014 can elevate the pace of hiring to at least last year's average.
At 6.6 percent, the rate is the lowest it's been in more than five years. That should be cause for celebration. The Federal Reserve had once said the economy might be weaned off its stimulus of near-zero short-term interest rates once unemployment fell to 6.5 percent. At that point, the gravitational pull of the recovery was supposed to be enough to propel growth. Not anymore.
What happened? The unemployment rate has become somewhat misleading. That's because lots of Americans have stopped looking for work in the past few years. Once people without a job stop looking for one, they're no longer counted as unemployed. When fewer people are counted as unemployed, the rate will fall.
(Read more: US jobless claims fall, but workers grow less productive)
Some of these people have retired. Some have abandoned a futile hunt for work. Or have returned to school. The share of people either working or looking for work dipped to 63 percent in January from 66 percent at the end of 2007, when the recession began.
Compared with before the recession, 1.35 million more people fall into a category of Americans who say they want a job but aren't actively seeking one. If you count them, the unemployment rate in January would have been 7.4 percent.
One of the recovery's frustrating failures has been the inability of people who've been out of work for at least six months to find a job. These long-term unemployed number around 3.6 million. Their number has declined by more than 1 million over the past year, but they still account for a high 36 percent of all unemployed Americans.