Ahead of the Bell: US unemployment benefits
WASHINGTON (AP) — The Labor Department reports on the number of people who applied for unemployment benefits last week at 8:30 a.m. Eastern Thursday.
APPLICATIONS DOWN: The expectation is that applications fell to 275,000 last week, according to a survey of economists by data firm FactSet.
In the previous week, applications rose to 282,000, still near historically low levels.
The weekly benefit applications number, which serves as a proxy for job layoffs, has been below 300,000 for the past six months, something that last occurred 42 years ago, highlighting the nation’s recovery from the recession that ended in 2009.
The government reported last week that the unemployment rate fell to a seven-year low of 5.1 percent in August. However, employers adding a moderate 173,000 jobs, the fewest in five months.
The Federal Reserve is closely monitoring economic data in advance of its meeting next week, when Fed officials could decide to raise interest rates for the first time in nearly a decade.
A key Fed rate has been at a record low near zero since December 2008 as the central bank battled to pull the economy out of the worst economic downturn since the 1930s. With unemployment down from a recession-driven 10 percent high, many economists believe the Fed needs to start raising rates.
However, another Fed priority, keeping inflation rising at an optimal level of 2 percent a year, has not been met and recent developments including an economic slowdown in China, falling oil prices and a rising dollar, will likely make the inflation target harder to meet, at least in the short term.
Economists see a September rate hike essentially as a coin toss.