Ahead of the Bell: US Unemployment Benefits
WASHINGTON (AP) — The number of Americans seeking unemployment aid likely fell last week but remained at a level signaling tepid hiring.
Economists forecast that weekly applications dropped to a seasonally adjusted 377,000, down from 382,000 the previous week. The Labor Department will release the report at 8:30 a.m. EDT Thursday.
Weekly applications for jobless aid have been creeping up for the past month, partly because Hurricane Isaac caused widespread temporary layoffs three weeks ago. But the trend suggests hiring isn't getting any better.
The four-week average of applications, a less volatile measure, has increased for five straight weeks and is near a three-month high.
Weekly unemployment benefit applications are a measure of the pace of layoffs. When applications rise consistently above 375,000, it usually indicates that hiring is too weak to significantly lower the unemployment rate.
U.S. employers added only 96,000 jobs last month, below the 141,000 in July and much lower than the average 226,000 added in the first three months of the year. Recent job gains are barely enough to keep up with the growth of the working age population and aren't enough to rapidly drive down unemployment.
The unemployment rate dropped in August to 8.1 percent from 8.3 percent, but only because the number of people working or looking for work fell.
The economy isn't growing fast enough to support much more hiring. It grew at a weak 1.7 percent annual rate in the April-June quarter, down from 2 percent in the January-March quarter and 4.1 percent in the final three months of last year.
Growth isn't likely to get much better for the rest of this year. Economists expect it to grow at a roughly 2 percent pace. That's typically too weak to create enough jobs to lower the unemployment rate.
A survey of chief executives, released Wednesday, found a sharp drop in the number of large companies that plan to step up hiring or boost investment in the next six months. They cited worries over tax and budget policies in the United States and slower growth in Europe and China for the gloomier outlook.
Some recent indicators have been more optimistic. Consumer confidence jumped to a seven-month high in September, the Conference Board said Tuesday. Home prices are rising steadily nationwide. And sales of new homes remained near a two-year high in August, the Commerce Department said Wednesday.