Applications for US unemployment benefits likely rose last week, though remain at lower level

Economic IndicatorsAssociated 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.

MODEST RISE: Economists forecast that weekly applications increased 9,000 to a seasonally adjusted 287,000, according to a survey by the data firm FactSet.

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That would be the second straight increase, but from a very low level. Applications plunged 42,000 to 267,000 three weeks ago, a sign that companies were cutting few jobs. Yet that drop also likely reflected seasonal volatility stemming from the end of the holiday shopping season and the 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.

The four-week average of applications, a less-volatile measure, has fallen 15 percent in the past year to 292,750. That is a very low level historically.

HEALTHY JOB MARKET: Weekly applications are a proxy for layoffs. They have remained near or below 300,000 since September, a sign that employers are holding onto their workers.

The low level of applications has also coincided with a big step-up in hiring. Employers have added more than 1 million jobs just since November, the best three-month pace since 1997.

More than 3.2 million jobs have been created in the past year. That's helped lower the unemployment rate to 5.7 percent in January from 6.6 percent 12 months earlier.

And average hourly pay rose 0.5 percent last month, the most in six years, the Labor Department said Friday. While economists cautioned against reading too much into one month's figure, it suggested employers may finally feel the need to raise wages to attract new workers and keep the ones they have.