Applications for US unemployment benefits likely fell last week, economists forecast

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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DROP EXPECTED: Economists forecast that weekly applications fell 18,000 to a seasonally adjusted 295,000, according to a survey by the data firm FactSet.

The weekly applications are a proxy for layoffs. Applications below 300,000 are typically consistent with healthy job gains.

The four-week average of applications, a less-volatile measure, has fallen 13 percent in the past year to 294,500. That is a very low level historically.

STRONG HIRING: The steady decline in applications has coincided with a big step-up in hiring. Employers added more than 1 million jobs from November through January, the strongest three-month pace since 1997.

That pace of hiring probably won't be sustained for much longer, but economists forecast healthy job gains will go on. They expect that the government's February jobs report, due Friday, will show that 240,000 jobs were added.

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The unemployment rate is projected to fall to 5.6 percent, from 5.7 percent.

The strong job gains are showing some signs of finally lifting paychecks for more workers. Average hourly pay rose 0.5 percent in January, the most in six years. Economists forecast that wages ticked up 0.3 percent in February.

Other recent data suggests that the job market remains solid. Payroll processor ADP said Wednesday that businesses added 212,000 jobs in February. That's down from 250,000 in January, but still a healthy gain.

And a survey of services firms, including hotels, restaurants, insurance agencies and retailers, found that service industries stepped up hiring last month.