WASHINGTON (AP) — The Labor Department reports on the number of people who applied for U.S. unemployment benefits last week. The report will be released at 8:30 a.m. Eastern time Thursday.
DROP LIKELY: Economists expect applications plunged by 26,000 to a seasonally adjusted 353,000 last after a sharp increase earlier this month, according to a survey by FactSet. The number of people seeking unemployment benefits rose 10,000 in the week that ended Dec. 14 after surging by 64,000 the previous week. Economists dismissed the increases, saying they were warped by volatility around Thanksgiving. Labor officials say it has been difficult to factor in the timing of the holiday, which came later than usual this year. The less-volatile four-week average rose 13,250 two weeks ago to 343,500. Economists hope the report Thursday will provide some clarity, but caution that the Christmas and New Year's holidays are likely to create more seasonal ambiguity.
ECONOMY MENDING: The economy has shown signs of improvement recently, so much so that the Federal Reserve announced Dec. 18 that it would reduce its stimulus spending on bonds by $10 billion — to $75 billion a month. The economy expanded at a 4.1 percent annual pace from July through September, fastest rate since late 2011 and much greater than previously thought. Hiring has been healthy for the past four months. The economy added an average of 204,000 jobs every month from August through November, a solid improvement from earlier in the year.
The unemployment rate fell in November to a five-year low of 7 percent. Still, that remains above the 5 percent to 6 percent rate that would signal a normal job market.