Applications for US unemployment benefits likely rose last month to still-low 270,000

Economic Indicators Associated Press

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

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INCREASE LIKELY: Economists forecast that the number of people seeking unemployment aid rose to a still-low 270,000 last week, up from 255,000 the previous week, according to a survey by data firm FactSet.

Applications are a proxy for layoffs. The previous week's figure was the lowest in nearly 42 years, strong evidence that Americans are experiencing an unprecedented level of job security.

An increase from that level isn't a concern for the job market. Any figure below 300,000 is historically low and points to few layoffs and potentially solid hiring.

STEADY HIRING: Employers have added an average of 221,000 jobs a month in the past three months, driving down the unemployment rate to a seven-year low of 5.3 percent.

They have created nearly 3 million jobs in the past year. With that many more people earning paychecks, spending should pick up a bit and help fuel growth for the rest of this year.

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One reason that benefit applications will likely rise in Thursday's report is that some of the drop two weeks ago was temporary.

Auto plants and other factories close briefly in July to prepare for next year's models. That pushed up applications earlier this month. Once many of the factories reopened, applications then fell back.

On Wednesday, the Federal Reserve highlighted the improving job market in the statement it released after its two-day meeting. The Fed made no change in the short-term interest rate it controls, but said the "labor market continues to improve, with solid job gains and declining unemployment."

That is a sunnier assessment than its previous meeting in June. That suggests the Fed is closer to its goal of pushing the job market back to full health, analysts said, and may be getting closer to raising rates. Many economists think that will happen in September, but it could be delayed until December.