Ahead Of The Bell: Unemployment Benefits

WASHINGTON (AP) — Applications for unemployment benefits have fallen steadily over the past few months, and a likely increase last week won't change that overall trend.

Economists forecast that weekly applications edged up 3,000 to a seasonally adjusted 370,000, according to a survey by FactSet, a provider of financial data. The Labor Department will release the report at 8:30 a.m. Thursday.

A consistent decline in applications has coincided with the best job growth since last spring. More jobs could bolster consumer confidence and spending, providing a needed jolt to the economy.

Two weeks ago, the four-week average of applications fell to 375,750, the second-lowest level since June 2008. The average has fallen 10.1 percent in the past four months. When applications fall consistently below 375,000, it usually signals that hiring is strong enough to lower the unemployment rate.

Hiring has picked up. Employers added a net gain of 243,000 jobs in January, the Labor Department said last week, far more than economists had projected. That was the biggest gain in nine months. The unemployment rate fell for the fifth straight month to 8.3 percent.

From November through January, the economy has added an average of 201,000 net jobs per month.

The increased hiring in part reflects faster economic growth. The economy expanded at an annual rate of 2.8 percent in the final three months of last year — a full percentage point higher than the previous quarter.

Most economists expect growth will slow a bit in the current quarter, because companies won't need to rebuild their stockpiles of goods as much as they did in the winter.

But some economists are increasingly optimistic that the economy will steadily expand this year, given last month's unexpectedly large job gains and other positive signs.

U.S. manufacturing activity grew in January at the fastest pace in seven months. Americans are buying more cars and trucks. And consumers stepped up borrowing in November and December by the most in a decade, which could indicate they are growing more confident in the economy.