Ahead of the Bell: US Unemployment Benefits
WASHINGTON (AP) — The number of Americans seeking unemployment benefits likely stabilized last week after seasonal factors distorted the previous two weeks.
Economists forecast that weekly applications dropped by 14,000 to a seasonally adjusted 374,000, according to a survey by FactSet. The Labor Department will release the report at 8:30 a.m. EDT Thursday.
The department said last week that applications jumped 46,000 to 388,000, the highest level since July. The increase followed a sharp drop in the previous week.
The Labor Department cautioned that the two weeks were affected by technical factors. Normally, many applicants delay filing for benefits until the start of a quarter because doing so can produce larger checks. But California didn't experience the expected jump until the second week of the quarter, which distorted the previous two weeks figures.
A more reliable gauge, the four-week average, ticked up to 365,500. That's a level consistent with modest hiring.
When they consistently fall below 375,000, it typically indicates that hiring is strong enough to lower the unemployment rate.
Layoffs have also fallen to pre-recession levels in the past three years. But overall hiring is still modest. Employers are hesitant to add more workers as long as growth remains tepid and Europe's financial crisis threatens to push that region into recession.
The weak job market has been a key topic in this year's presidential election, which is down to its final days. Voters will have one final employment report to consider, which comes out four days before Election Day.
There have been some signs that the economy is improving.
The unemployment rate fell in September to 7.8 percent. That's the lowest level since January 2009 — President Barack Obama's first month in office. The rate fell because a government survey of households found a huge increase in the number of people who had jobs. Still, a jump in part-time employment accounted for most of the gain.
Retail sales grew in September at a healthy clip. And home sales and residential construction have shown steady improvement this year, helped by stable gains in home prices and the lowest mortgage rates in decades.
Still, the economy is not growing fast enough to generate much hiring. Growth slowed to a tepid annual rate of 1.3 percent in the April-June quarter, down from 2 percent in the previous quarter. Most economists see growth staying at or below 2 percent in the second half of the year. The Commerce Department will issue its first estimate of growth in the July-September quarter on Friday.