Ahead of the Bell: US Unemployment Benefits
WASHINGTON (AP) — The number of people applying for unemployment aid likely increased last week, but the broader trend in layoffs should keep pointing toward a stronger job market.
Economists forecast that applications rose 8,000 to a seasonally adjusted 340,000, according to a survey by FactSet. The Labor Department will release the report at 8:30 a.m. EDT Thursday.
Last week, the department said that applications fell 10,000 to 332,000. That pushed the four-week average of applications, a less volatile measure, to 346,750, the lowest level in nearly five years.
Even if economists' forecasts for an increase are accurate, the four-week average could fall again. That's because four weeks ago, applications were 366,000. Any figure significantly below that level should lower the average.
A steady decline in unemployment claims signals companies are laying off fewer workers. That suggests companies aren't worried that business will fall off in the near future.
The number of applications for benefits has dropped five times in the past six weeks and has declined 13 percent since mid-November.
Job growth has also picked up in that stretch. Employers have added an average of 200,000 jobs per month in the past four months. That's nearly double the average from last spring.
More hiring and fewer layoffs also helped lower the unemployment rate last month to a four-year low of 7.7 percent.
Strong auto sales and a healthy recovery in housing are spurring more hiring and economic growth. Homebuilding permits jumped to their highest level in 4 ½ years in February, suggesting that recent strong gains in home construction will continue. New-home sales jumped 16 percent in January to the highest level since July 2008. Auto sales, meanwhile, rose in January and February after hitting a five-year high in 2012.
The housing and auto sectors have benefited from the Federal Reserve's efforts to keep interest rates low, policies the Fed stood by Wednesday after a two-day meeting.
The Fed reinforced its plan to keep short-term interest rates at record lows at least until unemployment falls to 6.5 percent, as long as the inflation outlook remains mild. And it said it would continue buying $85 billion a month in bonds indefinitely to keep long-term borrowing costs down.
During a news conference after the meeting, Chairman Ben Bernanke acknowledged the job market has accelerated but said the Fed wants to see sustained improvement before altering its stimulus policies. Unemployment benefit applications are one of the measures Bernanke said the Fed is closely monitoring.