Applications for US unemployment aid likely were unchanged last week as layoffs remain low

Markets Associated Press

The U.S. Labor Department reports on the number of people who applied for unemployment benefits last week. The report will be released at 8:30 a.m. Eastern on Thursday.

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FLAT READING: Economists forecast that weekly applications were unchanged at 315,000, according to a survey by FactSet. That's 9 percent lower than at the beginning of this year and is in line with pre-recession levels.

Applications are a proxy for layoffs, so the low level indicates that employers are letting go of fewer workers. When businesses are confident enough to keep staff, they are also likely to hire more people.

JOB MARKET HEALING: The low level of unemployment benefit applications is one of several recent measures pointing to a steadily improving job market.

On Tuesday, a government report showed that total layoffs in May fell below pre-recession levels. And more workers are quitting their jobs, which can be a sign of confidence, since most workers quit when they have new positions or are confident they can find one.

In addition, the number of open jobs jumped to the highest level in seven years, a sign that companies could step up hiring in the months ahead.

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Employers, meanwhile, added 288,000 jobs in June, the fifth straight month of job gains above 200,000. That's the first such stretch since 1999. The unemployment rate fell to 6.1 percent, the lowest since September 2008.

However, the steady hiring gains have yet to spur big increases in wages, which have barely kept pace with inflation since the end of the recession five years ago.

But more people with jobs translates into more paychecks, which could boost consumer spending and growth. After a sharp contraction in the economy in the first three months of the year, most economists expect growth to return in the April-June quarter and top 3 percent at an annual pace in the second half of 2014.