Ahead of the Bell: US Unemployment Benefits
WASHINGTON (AP) — The number of Americans seeking unemployment aid likely rose just slightly last week, staying at a level that indicates steady job gains.
Economists forecast that weekly applications for unemployment benefits rose 6,000 to a seasonally adjusted 345,000, 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 applications dropped 16,000 to 339,000, the second-lowest level in more than five years. Applications are a proxy for layoffs. The decline suggested companies are cutting fewer jobs.
Still, layoffs are only half the equation: Businesses also need to be confident enough in the economy to step up hiring. Job gains fell sharply in March, when employers added only 88,000 jobs, much lower than the 220,000 added in the previous four months.
The government will release the April jobs report Friday. It is forecast to show that job gains rebounded to 160,000 last month, according to FactSet. The unemployment rate is expected to remain unchanged at 7.6 percent.
Weekly applications of about 350,000 are generally consistent with moderate hiring. But other reports have signaled a worsening jobs picture.
On Wednesday, payroll provider ADP said companies added just 119,000 jobs in April. That's below its March figure of 131,000, which was revised down from 158,000. And a survey of manufacturers by the Institute for Supply Management found that a measure of employment fell sharply last month.
Many companies have been advertising more jobs but have been slow to fill them. Job openings jumped 11 percent during the 12 months that ended in February, but the number of people hired declined, according to a Labor Department report last month.
Across-the-board government spending cuts and higher taxes may be making businesses more cautious about hiring. And an increase in Social Security taxes could slow consumer spending. The Federal Reserve said Wednesday that those policy changes are "restraining economic growth."
Still, consumers are more optimistic that the job market is healing and will deliver higher pay later this year, according to a survey of April consumer confidence released this week. And lower gas prices could offset some of the pinch from the tax increase.
The economy grew at an annual rate of 2.5 percent from January through March, the government said last week. That was an improvement from the anemic growth of 0.4 percent in the final three months of last year. Most economists expect growth will slow in the current quarter to 2 percent or lower.