Applications for US jobless aid likely rose last week, but would remain near historic lows

MarketsAssociated 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.

LARGE RISE: Economists forecast that weekly applications increased 16,000 to a seasonally adjusted 280,000, according to a survey by FactSet.

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Yet such an increase wouldn't be a sign of trouble in the U.S. job market. Applications plunged two weeks ago to 264,000, the lowest level in 14 years. They have fallen 16 percent in the past year.

Applications are a proxy for layoffs. When growth of the labor force is factored in, the applications data show that the likelihood of being laid off is the lowest it's been since government records began in 1971.

The very low level of applications suggests employers are keeping their workers and may be ready to step up hiring.

HEALTHY JOB GAINS: U.S. businesses have already been adding jobs at a healthy pace. The steady decline in weekly applications in the past year suggests companies could accelerate their hiring even further in the coming months.

Employers have added an average of 227,000 jobs a month this year. That's up from an average of 194,000 last year. The economy has gained 2.64 million jobs in the past 12 months, the best annual showing since April 2006. The unemployment rate has fallen to 5.9 percent, a six-year low.

More hiring translates into more paychecks and more consumers able to spend, boosting economic growth.

Despite the improved hiring, the job market is still far from full health. More than 7 million people hold part-time jobs but want full-time work, up from 4.6 million before the downturn. And there are still twice as many people unemployed for longer than six months as there were before the recession, even though that figure has steadily declined in the past three years.