Ahead of the Bell: US Unemployment Benefits

AP News
Posted: May 10, 2012 6:18 AM
Ahead of the Bell: US Unemployment Benefits

The number of people applying for U.S. unemployment benefits probably ticked up last week. But the figure is likely to stay near a level that is consistent with modest job gains.

Economists forecast that the weekly applications rose by 5,000 to a seasonally adjusted 370,000, according to a survey by FactSet. The Labor Department will release the report at 8:30 a.m. Eastern Thursday.

Applications are a measure of the pace of layoffs. When they drop below 375,000 a week, it suggests the unemployment rate will fall.

The unemployment rate has already dropped a full percentage point since August _ to 8.1 percent in April.

Applications for unemployment benefits tumbled by 27,000 the week that ended April 28_ biggest drop in nearly a year.

But economists have worried that the job market might be losing momentum. Unemployment claims had been rising earlier in April after a long slide.

More importantly, job growth slowed sharply in March and April to an average 135,000 a month, barely enough to keep up with a growing population. From December through February, employers had created an average 252,000 jobs a month. That was the best three months of job growth since the recession ended in June 2009, not counting months thrown off by the hiring of temporary census workers in 2010.

The recent jobs picture has been clouded by an unseasonably warm winter. That allowed construction firms and other companies to hire earlier than usual, effectively stealing jobs from the spring. Economists are puzzling out how much of the slower hiring in March and April was weather-related payback and how much reflects economic weakness.

More than 500,000 Americans have left the labor force since February. That's one reason _ and not a good one _ that unemployment has continued to fall. People who are out of work but not looking for jobs aren't counted among the unemployed.

The economy grew at a disappointing 2.2 percent from January through March, a rate consistent with less than 110,000 new jobs a month.

There's still has a long way to go. The United States has regained only about 3.8 million, or 43 percent, of the 8.8 million jobs lost during and immediately after the recession.

The government did release some good news this week: In March, employers advertised 3.74 million job openings, the most since July 2008. The increase in U.S. job openings suggests that weaker hiring gains in March and April could be temporary. It usually takes one to three months for employers to fill openings.