Ahead of the Bell: US Unemployment Benefits

Applications for US unemployment benefits likely rose last week, economists predict

Associated Press
Applications for US unemployment aid jump to 329K
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In this April 22, 2014 photo, Erin Wilson, of Hannaford Bros. supermarket company, left, talks with a job seeker during a job fair Columbia-Greene Community College in Hudson, N.Y. The Labor Department releases weekly jobless claims on Thursday, April 24, 2014. (AP Photo/Mike Groll)

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.

MILD INCREASE EXPECTED: Economists forecast that the number of people seeking benefits rose 9,000 to a seasonally adjusted 313,000, according to a survey by FactSet. Despite the increase, that figure is in line with pre-recession levels, a sign that employers are cutting few jobs.

EASTER SURPRISE: One wild card impacting last week's figures could be the Easter holiday, which falls at different times each year. Last year Easter fell on March 30, while this year it was April 20. That makes it difficult for the government to seasonally adjust the applications data for Easter's impact. As a result, tomorrow's figure could fluctuate significantly from the previous week.

Underneath the weekly volatility, fewer people have been seeking unemployment aid, a hopeful sign for the job market and economy. Three weeks ago, applications fell to 302,000, the lowest level in almost seven years. They ticked up in the following week to 304,000.

The four-week average of applications, a less volatile number, has fallen to 312,000, down from 357,000 a year earlier and the lowest since October 2007. That was just two months before the Great Recession began.

Because applications are a proxy for layoffs, the low level of applications is a sign that employers expect economic growth to continue and are holding onto their workers.

Hiring has picked up as applications for jobless aid have fallen to their current levels.

Employers added 192,000 jobs in March, according to a separate government report. That follows gains of 197,000 in February, as the unemployment rate stayed at 6.7 percent for the second straight month.

Severe winter storms in January and December shut down factories, kept shoppers away from stores, and reduced home buying. That reduced hiring and overall economic growth. Employers added just 129,000 jobs in January and only 84,000 in December.

More jobs and higher incomes will be needed to spur better overall economic growth. For now, economists expect the bad weather contributed to weak growth of 1 percent to 1.5 percent at an annual rate in the January-March quarter. But with the weather improving, most analysts expect growth will rebound to nearly 3 percent in the April-June quarter.

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