The number of people seeking unemployment benefits ticked up slightly last week after two months of steady declines.
But the increase isn't enough to reverse the downward trend. The four-week average of applications, a less volatile measure, fell to its lowest level since April. The decline in the average signals that companies are laying off fewer workers.
Weekly applications for unemployment aid rose 2,000 to a seasonally adjusted 393,000, the Labor Department said Wednesday. It's the second increase in six weeks. The four-week average fell to 394,250. That's the eighth drop in the past nine weeks.
Even so, weekly applications would need to stay below 375,000 consistently to push down the unemployment rate significantly. They haven't been at that level since February.
The pace of hiring over the past few months has been mixed. The economy added only 80,000 jobs in October, the fewest in four months. But the government also said this month that employers added more jobs in August and September than it had initially reported. And the unemployment rate dipped to 9 percent.
The economy is growing but not quickly enough to generate many jobs. The economy expanded at a 2 percent annual rate in the July-September quarter, the government said Tuesday. That was down from an earlier estimate of 2.5 percent.
Growth would need to be more than twice that pace to significantly reduce unemployment, economists say.
The lower estimate was mostly because companies sharply reduced their stockpiles of goods. They probably didn't anticipate that consumer and business spending would remain strong through the summer.
A decline in inventories is not always a bad sign. Economists believe this could lead to better growth in the current quarter, if businesses anticipate more demand and restock their shelves.
Economists predict growth will strengthen to around 3 percent in the October-December quarter. Many raised their estimates after seeing encouraging October reports on retail sales and factory output.
Still, that brighter outlook hinges on whether Europe can prevent its financial crisis from getting worse. If not, Europe could fall into a recession, which could slow U.S. growth next year.
In the first six months of the year, the economy grew at an annual rate of just 0.9 percent. It was the weakest growth since the recession officially ended, which stocked fears over the summer that the economy could be on the verge of another downturn.
The stronger growth in the July-September quarter helped calm those worries. Still, Americans spent more while earning less, and they dipped into their savings to make up the difference. At the same time, businesses invested more in machines and computers, not workers.
Without more jobs and higher pay raises, consumers are unlikely to be able to sustain those gains.