Applications for US unemployment aid likely fell last week in latest sign of better job market

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 Wednesday at 8:30 a.m. Eastern. The release comes a day early because of the Thanksgiving holiday.

SMALL DROP EXPECTED: Economists forecast that weekly applications declined 6,000 to a seasonally adjusted 285,000, according to a survey by data provider FactSet.

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Applications have tumbled in the past year as companies lay off fewer workers and hiring picks up. The four-week average of applications, a less volatile measure, stood at 287,500 last week. That's not far from a 14-year low of 279,000 reached in late October. The average has fallen 16 percent in the past year.

BETTER JOB MARKET: Employers have added an average of 229,000 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 5.8 percent, a six-year low, down from 7.2 percent just a year ago.

Still, the number of people without jobs is concerning, with nearly 9 million Americans officially out of work. That compares with 7.6 million before the recession. Yet less than a quarter of the unemployed are actually receiving unemployment aid.

That partly reflects the drop in layoffs. But it also suggests that Americans are more confident that they will find work when they do lose jobs. They also may be finding jobs faster than in the earlier stages of the recovery. As a result, they may be less likely to seek unemployment benefits. The percentage of laid off workers who apply for benefits is lower than it was just after the recession ended five years ago, when hiring was slower and the unemployment rate topped 8 percent.

Still, the job gains have yet to push up wages much, limiting the broader growth of the U.S. economy. 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.