Ahead of the Bell: Unemployment benefits

AP News
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Posted: May 19, 2011 7:23 AM
Ahead of the Bell: Unemployment benefits

Fewer people likely applied for unemployment benefits last week for the second straight week, suggesting that a slow recovery in the job market is continuing.

Economists forecast that 420,000 laid-off workers applied for unemployment benefits last week, according to a FactSet survey. That would be a drop of 14,000 from the previous week.

The report is scheduled to be released by the Labor Department at 8:30 a.m.

Two weeks ago, the department reported that applications surged to an eight-month high of 474,000. That was nearly 100,000 above February's three-year low of 375,000 _ a level typically consistent with sustainable job growth. Weekly applications peaked during the recession at 659,000.

Even with last week's decline, the four-week average, a less volatile number, rose for the fifth straight week. It reached 436,750, the highest since November.

Labor Department analysts attributed much of the gains over the past month to technical and seasonal factors. More New York school systems closed late last month for spring break than expected and a new extended benefits program in Oregon caused applications in both states to jump.

More temporary factors could be on the way. The tornadoes that devastated much of Alabama and parts of other states late last month, as well as recent flooding on the Mississippi, could cause applications to rise.

Still, job growth has been strong this year. Businesses have added a net total of more than 250,000 jobs per month, on average, in the past three months, the fastest hiring spree in five years. The unemployment rate has dropped nearly a full percentage point in the past five months, though it remains a very high 9 percent.