Ahead of the Bell: US Unemployment Benefits
WASHINGTON (AP) — Weekly applications for U.S. unemployment benefits likely rose last week, though not by enough to suggest a slowdown in hiring.
Economists forecast that applications increased 11,000 to a seasonally adjusted 355,000, according to a survey by FactSet.
The Labor Department will release the report at 8:30 a.m. EST Thursday.
Even if the forecast for an increase is accurate, applications have been on a downward trend. They have fallen about 11 percent since November.
Applications are a proxy for layoffs. When they fall, it suggests that companies are cutting fewer jobs. More hiring may follow.
The decline bodes well for the February jobs report, which will be released Friday. Economists forecast it will show a gain of 152,000 jobs, according to a survey by FactSet, about the same as in January. The unemployment rate is projected to fall to 7.8 percent from 7.9 percent.
Employers added an average of 200,000 jobs a month from November through January. That was up from about 150,000 in the previous three months. In January they added 157,000.
Several reports this week suggest hiring remained healthy this month. Payroll services provider ADP said Wednesday that businesses added 198,000 jobs in February, above most analysts' expectations. And January's hiring was revised higher by 23,000 to 215,000.
Services firms, including retailers, restaurants and construction companies added jobs at a healthy clip, according to the Institute for Supply Management's monthly survey. An index of hiring by service companies slipped but remained near January's seven-year high.
The ISM's manufacturing survey found that factories also added workers in February, too, though at a slower pace than the previous month.
Strong auto sales and a healthy recovery in housing are spurring more hiring and economic growth. Builders started work on the most homes last year since 2008. New-home sales jumped 16 percent in January to the highest level since July 2008. And home prices, meanwhile, rose by the most in more than six years in the 12 months ending in January, according to real estate data provider CoreLogic.
The Labor Department said last week that applications fell 22,000 to 344,000. That's a sign companies aren't cutting more jobs because of worries about higher taxes or government spending cuts. Social Security taxes rose two percentage points Jan. 1, reducing the typical household's income by $1,000.
And $85 billion in across-the-board government spending cuts kicked in March 1 after the White House and Congress failed to reach a deal to avoid the reductions.
The cuts could slow economic growth and cost 700,000 jobs, according to the Congressional Budget Office. They could also reduce unemployment benefit checks for those out of work for more than six months by about 11 percent, according to the National Employment Law Project. Benefits average about $320 per week nationwide.