Ahead of the Bell: US Unemployment Benefits
WASHINGTON (AP) — The Labor Department reports on the number of people who applied for U.S. unemployment benefits last week. Report to be released Thursday at 8:30 a.m. EDT.
SMALL INCREASE: Economists forecast that applications rose to a seasonally adjusted 315,000 from 305,000 the previous week, according to a survey by FactSet.
STILL FEWEST IN 6 YEARS: Weekly applications for unemployment aid fell to 305,000 two weeks ago, the second-lowest level in the past six years. And the less volatile four-week average dropped to 308,000 two weeks ago. That's the lowest since June 2007, six months before the recession started.
LAYOFFS DOWN, BUT HIRING WEAK: Applications are a proxy for layoffs. They have declined steadily in the past three months as companies have cut fewer workers. That suggests more employers are confident enough in the economy to maintain their existing staffs.
Steady declines in applications are typically followed by more hiring. But that hasn't happened yet. In fact, job gains have slowed in recent months.
Employers have added an average of just 155,000 jobs a month in the last four months through August, according to government data. That's down from an average of 205,000 for the first four months of the year.
And on Wednesday, payroll provider ADP said that businesses added just 166,000 jobs in September, evidence that hiring remains sluggish. The ADP figures usually diverge from the government's more comprehensive employment report.
The government's September employment report was scheduled to be released on Friday. But it will now be delayed because of the government shutdown.
The economy may not be growing quickly enough to encourage companies to ramp up hiring. Most analysts forecast that growth has slowed to an annual rate of 1.5 percent to 2 percent in the July-September quarter, down from a 2.5 percent annual rate in the April-June quarter.
Economists predict that growth is rebounding to an annual rate of 2.5 percent to 3 percent in the current October-December quarter. But those forecasts were made before this week's impasse that shuttered the government. The shutdown could shave about 0.15 percentage points from the fourth quarter figure for each week it lasts.