Ahead of the Bell: Unemployment benefits
WASHINGTON (AP) — The number of people seeking weekly U.S. unemployment benefits has stabilized at a level that suggests hiring will be weak in the months ahead. Economists don't expect that changed last week.
They forecast that weekly unemployment benefit applications ticked down by 1,000 to a seasonally adjusted 385,000, according to a survey by FactSet. The Labor Department will release the report Thursday at 8:30 a.m. Eastern time.
Weekly benefit applications serve as a measure of the pace of layoffs. When applications rise above 375,000, it generally suggests hiring isn't strong enough to reduce the unemployment rate.
Applications declined steadily over the winter, coinciding with a burst of hiring. But they rose in the spring and have been stuck near 390,000 in the past five weeks.
Hiring, meanwhile, has slowed sharply, raising concerns about the pace of the recovery. Employers added an average of only 73,000 jobs per month in April and May. That's much lower than the average of 226,000 added in the first three months of the year.
The government will release the June jobs report Friday, and economists expect another month of weak hiring. They forecast that employers likely added only 90,000 jobs last month, according to FactSet. The unemployment rate is expected to be unchanged at 8.2 percent.
The economy isn't growing fast enough to support stronger job gains. It expanded at a 1.9 percent pace in the first three months of the year. That's down from a 3 percent pace in the final quarter of last year.
Also Thursday, private payroll provider ADP will issue its report on how many jobs were added by businesses in June. The report is seen by many economists as an early hint at what the government's report will show.
But the ADP survey has often deviated sharply from the government report. For example, in May, the Labor Department said employers added just 69,000 jobs — almost half ADP's estimate of 133,000.
Most recent economic data haven't been encouraging.
The manufacturing sector contracted in June for the first time in three years, the Institute for Supply Management, a trade group, said Monday. Export orders fell, a sign that Europe's debt crisis and weaker growth in big emerging markets, like China and India, are slowing overseas demand for U.S. goods.
Overall, new orders plunged by the most in a decade, the ISM report showed. That suggests domestic demand for manufactured goods is also falling.
A closely watched private survey released last week showed consumer confidence fell in June for the fourth straight month. The Conference Board said worries about the job market outweighed lower gas prices and steady improvement in the housing market.
One positive sign: home sales are up from last year, with prices rising in most cities and homebuilders planning to break ground on more projects in the next 12 months.
Still, the Federal Reserve has cut its growth forecast. It now expects growth of just 1.9 percent to 2.4 percent for 2012. That's half a percentage point lower than the range it estimated in April. The Fed also says the unemployment rate won't fall much further this year than it has already.
