WASHINGTON (AP) â¿¿ Applications for U.S. unemployment aid likely declined slightly last week to a level consistent with modest job gains.
Economists forecast that applications dropped 3,000 to a seasonally adjusted 368,000, according to a survey by FactSet. The Labor Department will release the report at 8:30 a.m. EST Thursday.
Economists caution that seasonal trends could distort the data. Typically, job cuts spike in the second week of January as retailers, restaurants and other companies lay off hundreds of thousands of temporary workers hired for the winter holidays.
The department seasonally adjusts the numbers to account for such trends, but the data can still be volatile.Overall, applications remain at a level that suggests employers are hiring at a slow but steady pace. Applications fluctuated between 360,000 and 390,000 for most of last year. At the same time, employers added an average of 153,000 jobs a month. That's just been enough to slowly push down the unemployment rate, which fell 0.7 percentage points last year to 7.8 percent. Employers added 155,000 jobs last month, nearly matching the average for the year. December's steady job gain suggests employers didn't cut back on hiring in the midst of the debate over the tax and spending changes known as the fiscal cliff. Many economists feared that the prospect of higher taxes and steep cuts in federal spending would cause a slowdown in job gains. That's a good sign, since more budget showdowns are expected. Congress must vote to raise the government's $16.4 trillion borrowing limit by sometime between mid-February and early March. If not, the government risks defaulting on its debt. Republicans will likely demand deep spending cuts as the price of raising the debt limit. The overall economy grew at an annual rate of 3.1 percent in the July-September quarter. But economists believe activity slowed considerably in the October-December quarter to a rate below 2 percent or less, in part because companies cut back on restocking.