Applications for US jobless aid likely rose last week; layoffs still at pre-recession levels

Economic Indicators 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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SLIGHT INCREASE: Economists forecast that weekly applications rose to 310,000, according to a survey by FactSet. That's up slightly from 304,000 in the prior weekly report. The number of people seeking benefits is close to the lowest level in seven years, a period shortly before the start of the recession.

Applications are a proxy for layoffs. Recent reports show that employers are letting go of fewer workers, a sign that they expect economic growth to continue. When businesses are confident enough to keep staff, they are also likely to hire more people.

JOB GROWTH: The low level of unemployment benefit applications has contributed to the recent acceleration in hiring.

Total layoffs in May fell below pre-recession levels, the government reported last week. Job openings are at their highest level in seven years. Plus, more workers are quitting their jobs. That churn suggests that more people have faith in an improving economy, since workers generally quit when they have an offer for a better position or confidence that they can find one.

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

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Still, the steady hiring gains have yet to boost wages significantly. Wage growth has barely matched inflation since the recession ended five years ago.

But more people with jobs increases the total number of 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 exceed 3 percent at an annual pace in the second half of 2014.