Ahead of the Bell: Unemployment Benefits
WASHINGTON (AP) — The number of Americans seeking unemployment benefits likely rose a bit last week but probably stayed at a level consistent with modest job growth.
Economists forecast that applications rose 11,000 to 354,000, according to a survey by FactSet. The Labor Department will release the report at 8:30 a.m. EST Thursday.
Weekly applications have fallen sharply the past four weeks, reversing a surge in November caused by Superstorm Sandy. People can claim unemployment benefits if their workplaces are closed and they aren't paid.
Applications are a proxy for layoffs. So the four-week drop suggests that companies are cutting fewer jobs — even if they aren't hiring aggressively enough to lower the unemployment rate significantly. The economy has generated a modest average of 151,000 jobs a month in 2012, not enough to drive down high unemployment.
The unemployment rate dropped to a four-year low of 7.7 percent in November from 7.9 percent in October. But the rate fell mostly because unemployed people gave up looking for work. The government counts people as unemployed only if they're actively seeking jobs.
Still, the steady drop in unemployment applications suggests that companies aren't laying off workers in advance of the "fiscal cliff" — the package of tax increases and spending cuts set to take effect next year if Democrats and Republicans can't reach a budget deal.
President Barack Obama said Wednesday that he was "pretty close" to an agreement with House Speaker John Boehner to avoid a Jan. 1 shock to the economy. But Democrats and Republicans are still sparring over details of Obama's effort to raise taxes on higher-income earners.
The U.S. economy has endured weak growth since the Great Recession ended in mid-2009. And economists surveyed by the National Association for Business Economics don't expect much progress in 2013.
They expect the economy to expand at a modest 2.1 percent pace next year after growing 2.2 percent this year. They expect to unemployment to go nowhere, averaging 7.7 percent throughout next year.