Ahead Of The Bell: US Unemployment Benefits
WASHINGTON (AP) â¿¿ More people likely sought unemployment benefits last week, though the increase probably won't be enough to suggest the job market is getting worse.
Economists forecast that applications rose 5,000 last week to a seasonally adjusted 355,000, according to a survey by FactSet. The Labor Department will release the report at 8:30 a.m. EST Thursday.
Last week, the department said the four-week average of applications, a less volatile number, fell to 356,750, the lowest since March 2008. That's a good sign that companies are cutting fewer jobs and the job market is improving. Weekly applications are a proxy for layoffs.
Still, the Christmas holiday may have artificially lowered the figures. Many state unemployment offices were closed for two days two weeks ago and could not provide exact data. That forced the government to rely on estimates. Normally, the government might estimate data for one or two states. Two weeks ago, it used estimates for 19.As a result, on Thursday the government could substantially revise the data from two weeks ago. Thursday's applications data will come a day before the government is scheduled to release December's jobs report. Most economists expect that will show hiring continued at a steady pace of about 150,000. Weekly applications have mostly fluctuated this year between 360,000 and 390,000. At the same time, employers have added an average of 151,000 jobs a month in the first 11 months of 2012. That's just enough to slowly reduce the unemployment rate. Unemployment remains high and companies are reluctant to ramp up hiring. The unemployment rate fell to 7.7 percent in November from 7.9 percent in October mostly because many of the unemployed stopped looking for jobs. The government counts people as unemployed only if they are actively searching for work. Companies may hire more in the coming months now that President Barack Obama and Congress have reached agreement to avoid most of the tax increases and spending in the fiscal cliff. But more battles over taxes and spending are likely in the coming weeks, which could keep companies cautious about hiring.
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