Ahead of the Bell: US Unemployment Benefits
WASHINGTON (AP) — The U.S. Labor Department reports on the number of people who applied for unemployment benefits last week. The report will be released at 8:30 a.m. Eastern time Thursday.
DROP EXPECTED: Economists predict that unemployment claims fell 9,000 to a seasonally adjusted 320,000 last week, according to a survey by FactSet. The level of applications for unemployment aid has already returned to pre-recession levels, despite a 24,000 increase the previous week.
LAYOFFS DECREASING: Unemployment benefits are a proxy for layoffs, and they’ve been coming down more or less steadily since peaking at 665,000 in March 2009 during the depths of the Great Recession. Another Labor Department report shows that layoffs are running nearly 40 percent below their peak in 2009. Though they’ve stopped cutting jobs, employers have been slower to add new ones: Hiring remains well below pre-recession levels. Still, the United States economy generated a solid 192,000 jobs in March on top of 197,000 in February.
FAR FROM HEALTHY: The economy has yet to return to full strength nearly five years since the recession officially ended in June 2009. Unemployment is down from a peak of 10 percent in October 2008 but remains high at 6.7 percent. The government reported Wednesday that the economy barely grew from January through March, advancing at an annual rate of just 0.1 percent. Economists largely blamed the first-quarter slowdown on unusually nasty winter weather. Most expect growth to pick up as the year wears on and to reach an annual rate of more than 3 percent from July through December. The Federal Reserve was confident enough in the economy’s strength to announce Wednesday that it would continue scale back a bond-purchasing program meant to keep long-term interest rates low and encourage more borrowing and spending.