Applications for US unemployment benefits likely rose last week

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.

INCREASE EXPECTED: Economists forecast that weekly applications rose 9,000 to a seasonally adjusted 289,000, according to a survey by data provider FactSet.

For almost four months, applications for jobless aid have hovered at historically low sub-300,000 levels. That suggests that employers expect strong economic growth to continue, causing them to hold onto their staff and potentially hire additional workers.

The four-week average, a less volatile measure, has dropped 16 percent to 290,250 in the past 12 months.

JOB GROWTH: As fewer people have sought unemployment benefits, job growth has steadily accelerated and helped fuel economic growth.

The economy expanded at an annualized rate of 5 percent during the July-September quarter, the strongest performance in 11 years. That follows a 4.6 percent annual rate in the April-June quarter, the government reported last week.

As growth has accelerated, so has hiring this year.

Employers added 321,000 jobs in November, bringing the total for the first 11 months of 2014 to 2.65 million new jobs. That already makes 2014 the best year for hiring since 1999.

The unemployment rate held steady at 5.8 percent, down from 6.7 percent at the start of the year.

Still, wage growth has lagged hiring. Average wages increased only 2.1 percent in the past 12 months. That means that incomes are only barely outpacing inflation, with core consumer prices — which excludes volatile energy and food costs — have risen 1.7 percent over the past 12 months.