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 around late February. If not, the government risks defaulting on its debt. Republicans will likely demand deep spending cuts as the price of raising the debt limit.Still, hiring is too weak to rapidly reduce the number of unemployed, which stands at 12.2 million. That's far higher than the 7.6 million who were out of work when the Great Recession began in December 2007. There are signs the economy is improving. The once-battered housing market is recovering, which should lead to more construction jobs in the coming months. A gauge of U.S. service firms' business activity expanded in December by the most in nearly a year. Auto sales for 2012 were the best in five years. And Americans spent more at the end of the crucial holiday shopping season.
WASHINGTON (AP) â¿¿ Applications for U.S. unemployment benefits stayed near a four-year low in December, one of several signs of stability in the slowly improving job market. While the data has been affected more recently by seasonal factors, the broader downward trend likely continued at the start of 2013. Economists forecast that applications dropped 7,000 last week to a seasonally adjusted 365,000, 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 that many state unemployment offices were closed for the New Year's holiday and did not submit complete data. As a result, the department relied on estimates for nine states. Two weeks ago, the department said it used estimates for 19 states because of Christmas closings. In a typical week, the government estimates only one or two states. As a result, on Thursday the government could substantially revise the data from two weeks ago. Still, the trend seems to be improving. The department said last week that the four-week average of applications, a less volatile number, was basically unchanged at 360,000, just above a four-year low reached the previous week. That's a good sign that companies are cutting fewer jobs and the job market is improving. Weekly applications are a proxy for layoffs. Employers added 155,000 jobs in December, the department said last week, while the unemployment rate remained 7.8 percent. The gain in hiring nearly matched the average of 153,000 jobs per month in 2011 and 2012. That's just been enough to slowly push down the unemployment rate, which fell 0.7 percentage points in 2012. 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.