Ahead of the Bell: US Unemployment Benefits
WASHINGTON (AP) — The number of people seeking unemployment aid likely fell last week, a sign that companies will probably keep hiring at a modest but steady pace.
Economists forecast that applications dropped 8,000 to a seasonally adjusted 360,000, according to a survey by FactSet. The Labor Department will release the report at 8:30 a.m. EST Thursday.
The department said last week that applications jumped by 38,000 after falling to the lowest level in five years the previous week. That volatility, however, likely reflected the government's difficulty adjusting its numbers to account for layoffs after the holiday shopping season.
Overall, the trend has been downward in recent weeks. The four-week average of applications, a less volatile figure, has fallen about five percent in the past three months. Applications are a proxy for layoffs. As they fall, net hiring typically rises.
Job gains have picked up in the past three months. Employers added an average of 200,000 jobs in the November-January period.
The government said last week that 157,000 jobs were added in January. But revisions to the previous two years showed that about 600,000 more jobs were created in 2011 and 2012 than previously thought. Employers added 181,000 jobs per month last year, up from an earlier estimate of 153,000.
Still, the unemployment rate ticked up to 7.9 percent from 7.8 percent last month. Economists expect it will decline if hiring continues at last year's monthly pace of 180,000. The rate fell 0.7 percentage points in 2012.
More hiring and income is needed to fuel greater economic growth. The government said last week that the economy shrank at an annual rate of 0.1 percent in the October-December quarter, hurt by a sharp cut in defense spending, fewer exports and sluggish growth in company stockpiles.
Still, the drop in defense spending and inventories are likely one-time events and analysts expect the economy to grow around 2 percent this year. Strength in areas like housing and auto sales could partly offset government spending cuts this year.
Home builders are stepping up construction to meet rising demand. That should create more construction jobs. Home prices and sales are also increasing.
The housing recovery is boosting jobs at home-supply stores and retailers. Home Depot said Wednesday that it plans to hire 80,000 temporary employees for the spring selling season. The jobs will be part-time and full-time, the company said.