Applications for US unemployment benefits likely rose last week from very low level

IndustrialsAssociated Press

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.

REBOUND AFTER SHARP DROP: Economists forecast that weekly applications increased to a seasonally adjusted 280,000, according to a survey by the data firm FactSet. That would reverse much of the previous week's sharp decline, when applications fell 20,000 to 268,000.

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Even with that increase, however, applications would remain far below 300,000, a historically low level that is usually consistent with solid job gains.

Weekly applications are a proxy for layoffs. When fewer companies cut workers, it suggests they are confident in the economy and may hire more staff.

HIRING HICCUP: Economists are watching the unemployment benefits data a bit more closely after hiring stumbled in March.

The government said last week that employers added just 126,000 jobs that month, the fewest in 15 months and snapping a year-long streak of monthly gains above 200,000. The unemployment rate remained 5.5 percent.

The slowdown in hiring followed a raft of indicators that pointed to a slowing economy. Factory output has fallen this year as businesses are placing fewer orders for industrial machinery and other equipment. Lower oil prices, in particular, have reduced demand for drilling equipment.

Consumers have also remained cautious about spending, despite solid job growth and cheaper gas. Many Americans appear to be saving the windfall from lower prices at the pump or using it to pay down debt.

Harsh winter weather has also weighed on growth, as cold temperatures and snowstorms kept people away from stores and open houses. The stronger dollar has made U.S. exports more expensive, cutting overseas sales.

Still, applications for unemployment benefits have remained low, suggesting that weaker growth may have caused businesses to delay hiring, but it hasn't panicked them into cutting jobs.

Other data this week suggest the economic slowdown could be temporary, a sign hiring may rebound. A survey of services firms, such as retailers, banks, and construction companies, found that they grew at a healthy pace last month. And government data released Tuesday showed that the number of available jobs climbed to a 14-year high in February, a sign that hiring could pick up in coming months.