Applications for US unemployment benefits likely changed little last week

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

LITTLE CHANGE: Economists forecast that applications barely fell to 278,000 from 279,000 in the previous week, according to a survey by the data firm FactSet.

That would be the 15th week below 300,000, a historically low level that points to a healthy job market. The figures indicate that businesses are confident enough in the economic outlook to hold onto their staffs.

Applications are a proxy for layoffs, so the very low readings are also a sign that Americans are experiencing solid job security.

STEADY HIRING: In addition to holding onto workers, businesses are also stepping up hiring.

Employers added 280,000 jobs in May, a strong showing that suggests companies are staffing up in anticipation of robust consumer demand in the coming months.

That was more than last year's monthly average of 263,667, which was the most in 15 years.

The unemployment rate rose to 5.5 percent from 5.4 percent, but even that contained some good news: more Americans, encouraged by their prospects, started looking for work last month. Not all immediately found jobs, lifting the unemployment rate.

Other data also suggests that the economy is picking up after faltering at the start of the year.

Americans stepped up their spending at retail stores in May, a sign that job growth and cheaper gas prices are finally encouraging more consumers to spend freely. And consumers ramped up their car purchases in May to the fastest sales pace since July 2005.

A healthier consumer could be a key driver of growth in the second half of this year. Consumer spending accounts for about 70 percent of economic activity.

The economy contracted 0.7 percent in the first three months of the year, a sharp slowdown from growth of 3.6 percent in the second half. Yet that is increasingly seen as temporary: most economists expect growth will recover to a 2 percent to 2.5 percent pace in the second quarter.