Applications for US jobless aid likely dropped back below 300,000 last week

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 Thursday at 8:30 a.m. Eastern.

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SHARP DROP LIKELY: Economists forecast that weekly applications fell 26,000 to a seasonally adjusted 287,000, according to a survey by data provider FactSet.

Applications in the previous week shot up to 313,000, the first time the report came in above 300,000 in nearly three months. The four-week average, a less volatile measure, rose 6,250 to 294,000.

Still, applications have steadily fallen during the course of the year. The four week average has plummeted 12.2 percent in that time, putting it close to the 14-year low of 279,000 reached last month.

Applications are a proxy for layoffs. As fewer people seek unemployment benefits, it suggests that employers are holding onto more workers and potentially looking to bolster their hiring.

STRONGER JOB MARKET: The decline in application for unemployment benefits has been matched by a surge in hiring.

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Employers have added an average of 228,500 jobs a month this year, putting 2014 on pace to be strongest year for hiring since 1999. That's up from an average of 194,000 last year. The unemployment rate has fallen to a six-year low of 5.8 percent, down from 7.2 percent just a year ago.

The November jobs report being released Friday is expected to show gains of 225,000 last month, according to FactSet.

The payroll processer ADP said Wednesday that private companies added 208,000 jobs in November.

Even with gains this year and five years removed from the end of the recession, nearly 9 million people are out of work. Before the recession began in 2007, there were 7.6 million unemployed Americans. Less than a quarter of the people counted as jobless by the Labor Department are collecting unemployment benefits.

The recent job gains have not lifted wages by much, stifling economic growth. Average hourly pay rose 3 cents in October to $24.57. That's just 2 percent above the average wage 12 months earlier and barely ahead of a 1.7 percent inflation rate.