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 Thursday.
DROP EXPECTED: Economists forecast that the number of people seeking benefits will dip 11,000 to a seasonally adjusted 337,000, according to a survey by FactSet. That's slightly above pre-recession figures, a sign that corporate layoffs remain low.
FEW LAYOFFS, LITTLE HIRING: Applications are a proxy for layoffs. They surged two weeks ago, potentially because winter storms caused some people to delay submitting their applications for benefits. But the four-week average of applications held steady at 338,250 in the report released last week. That indicates that employers may be reluctant to hire, but they aren't so concerned about the prospects for growth to increase layoffs.
The Labor Department will release Friday its February jobs report after what has been a disappointing winter for the economy.
Employers added just 113,000 jobs in January. That followed a gain of only 75,000 in December. Those figures are about half the monthly pace of the past two years.
Economists have projected that 145,000 jobs were added last month. But there are signs that this forecast might be optimistic after a pair of lackluster reports was released Wednesday that suggest that winter storms hampered hiring in February.
A survey by payroll processor ADP said private businesses added just 139,000 jobs last month. But that figure does not include state, local and federal government workers, unlike the upcoming Labor Department report. Most economists project that governments shed workers in February.
And a survey of service companies by the Institute for Supply Management found that its measure for hiring plunged 8.9 percentage points to 47.5, evidence that many companies let go of employees in February. Any reading above 50 indicates expansion in the trade group's index.
On the positive side, the unemployment rate fell to a five-year low of 6.6 percent in January from 6.7 percent, as more of those out of work found jobs. Hiring rose in manufacturing and construction, two higher-paying industries that are key drivers of growth.
But the ferociously cold economy appears to have kept the economy in check. Sales of existing homes plunged in January to the slowest pace in 18 months, hut by the weather, higher interest rates and rising home prices. Signed contracts to buy existing homes have stayed flat for February and January, a sign that the weak sales could persist through March and April.
Consumer spending increased 0.4 percent in January, but much of that growth came from people paying higher heating bills. Auto purchases fell, as did spending on non-durable goods such as clothing.
With slow job growth, the housing recovery losing steam and consumers unexcited to shop, economists have trimmed their forecasts for the January-March quarter. Most now expect growth in the first three months of the year to be 2 percent at an annual rate or below, down from forecasts of about 2.5 percent at the beginning of the year. Most expect growth to then pick up and reach nearly 3 percent for the full year, up from under 2 percent in 2013.
- Budget, Tax & Economy
- Politics & Government