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 time Thursday.
DROP EXPECTED: Most economists expect applications fell last week after an unusual bump up two weeks ago. Applications surged 68,000 to a seasonally adjusted 368,000, the biggest increase in more than a year.
Economists dismissed the spike, saying it likely reflected a late Thanksgiving holiday that has distorted the Labor Department's seasonal adjustments. Labor officials have said that it has been difficult to factor in the timing of the holiday, which was later in November than usual.
Thursday's report will indicate whether the jump was caused by that or is in fact a sign of rising layoffs and a worsening job market
The less volatile four-week average rose 6,000 to 328,750 two weeks ago. That is close to pre-recession levels and suggests that companies are cutting few jobs.
CONSISTENT HIRING: Applications are a proxy for layoffs. Until the other week, they had fallen steadily, coinciding with a pickup in hiring.
The economy has added an average of 204,000 jobs a month from August through November, up from an average of 146,000 in May through July. The unemployment rate fell in November to a five-year low of 7 percent.
The unemployment rate remains above the historic averages of 5 percent to 6 percent that are associated with strong job markets.
Still, Federal Reserve Chairman Ben Bernanke said Wednesday that the steady job gains would likely continue. Americans are spending more and the economy is less restrained by higher taxes and government spending cuts, he said.
Those trends have "increased our confidence that the job market gains will continue," Bernanke said at a press conference.
The Fed said Wednesday that it would scale back its monthly bond purchases to $75 billion from $85 billion. The purchases are intended to lower long-term interest rates and encourage more spending. The cut suggests that Fed policymakers think the job market and economy will continue to improve even with less help from the Fed.
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