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. The report will be released at 8:30 a.m. Eastern on Thursday.
DROP PROJECTED: Economists forecast that applications fell 12,000 to a seasonally adjusted 336,000, according to a survey by FactSet. That would be roughly in line with pre-recession levels, a sign that corporate layoffs are low.
PREVIOUS SPIKE: Cold weather appears to have led to work stoppages at construction sites. That partially caused the number of Americans seeking benefits two weeks ago to climb 19,000 to 348,000.
The increase caused the less volatile four-week average to inch up 750 to 330,000. This ended three straight weeks of the average declining.
HIRING MAY PICK UP: Fewer applications for unemployment benefits should point to stronger job gains in January after a disappointing December.
Just 74,000 jobs were added in December, a major drop-off from the average gains of 214,000 in the previous four months.
Applications for unemployment benefits of around 330,000 suggest that hiring could return to the average pace of job creation over the past two years of about 185,000 a month.
The unemployment rate fell in December to 6.7 percent from 7 percent. But much of the decline was due to the departure of about 347,000 unemployed people who stopped looking for work. Once people without jobs stop looking for one, they're no longer counted as unemployed.
The Labor Department will issue its January employment report on Friday.
A private sector jobs report suggests that hiring should have rebounded last month.
Payroll processor ADP said Wednesday that companies added 175,000 jobs in January. The ADP numbers cover only private businesses and wildly diverged from the government's more comprehensive report in December.
ADP reported 227,000 new jobs in December, or 153,000 more than what the Labor Department did.
Recent economic reports have fueled concerns of a slowdown in the United States and other economies worldwide.
Stock markets have plummeted. U.S. manufacturing has experienced a slowdown, according to a private survey released Monday by the Institute for Supply Management. Turmoil in emerging economies such as China and Turkey and signs of slower growth in the United States have also raised doubts about whether the Federal Reserve will continue to pare down its monthly bond purchases.
Still, many economists have become more optimistic about the economy accelerating this year. Several are predicting a solid annual growth rate of 3 percent or more, the strongest performance since 2005.
Separately, about 1.4 million fewer Americans are receiving unemployment benefits after a 5-year old emergency federal program expired Dec. 28. The program provided up to 47 extra weeks of unemployment aid paid for by the federal government.