Applications for US jobless aid likely rose last week; levels still reflect solid hiring

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.

BIG INCREASE: Economists forecast that weekly applications jumped 20,000 to a seasonally adjusted 285,000, according to a survey by the data firm FactSet.

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But that surge comes after applications plunged 43,000 in the prior week to 265,000, the lowest level since April 2000. There has been volatility in recent reports due to the end of the holiday shopping season and the recent Martin Luther King Jr. holiday, when state unemployment offices were closed. The government tries to adjust for such seasonal patterns, but isn't always able to do so perfectly.

Still, the four-week average of applications was 298,500. That average tends to be consistent with employers adding more than 200,000 jobs each month.

JOB GROWTH: Weekly applications are a proxy for layoffs. Because the average has been near or below 300,000 since September, this indicates that companies are keeping their workers and potentially looking to hire on the expectation that the economy will continue growing.

The Friday employment report is expected to show that employers added 230,000 jobs in January, according to FactSet.

Nearly 3 million new jobs were created in 2014, as the unemployment rate dropped to 5.6 percent from 6.7 percent.

But the increased demand for workers has yet to boost incomes by much. Average wages rose just 1.7 percent in 2014, essentially in line with inflation. Wage growth of 3.5 percent is consistent with a healthy economy.