US applications for jobless aid likely decreased last week, points to stronger job market

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 Thursday at 8:30 a.m. Eastern.

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SLIGHTLY LOWER: Economists forecast that weekly applications declined 2,000 to a seasonally adjusted 285,000, according to a survey by FactSet.

If the forecasts are accurate, it would mark the eighth straight week of applications below 300,000. Applications below that level are consistent with a healthy job market.

Applications are a proxy for layoffs and have fallen 20 percent in the past year. The steep decline suggests rising confidence among businesses in the economy, causing them to keep their workers and potentially look to hire more employees.

JOB GAINS LIKELY: The decline in applications has overlapped with stronger hiring this year. Employers have added an average of 227,000 jobs a month in 2014, up from an average of 194,000 last year. Employers have added 2.64 million jobs in the past 12 months, the best showing since April 2006. The unemployment rate has fallen to 5.9 percent, a six-year low.

Economists predict that the Friday jobs report will show that 230,000 jobs were added in October. The unemployment rate is projected to hold steady.

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U.S. companies added 230,000 jobs in October, a private survey said, the most in four months and a sign that businesses are still willing to hire despite signs of slowing growth overseas.

Payroll processer ADP said Wednesday that private companies added 230,000 jobs in October. Job gains above 200,000 are usually enough to lower the unemployment rate.

Still, the improvement in hiring has yet to translate into higher wages. Average wages have grown slightly faster than inflation. Median annual household income at $54,045 remains 4.6 percent lower than incomes when the recession began in late 2007, according to Sentier Research.