AHEAD OF THE BELL:
Unemployment benefits

[March 03, 2011]  WASHINGTON (AP) -- More people probably applied for unemployment benefits last week, although the broader trend suggests companies will hire a bit more this year.

Economists forecast that the number of people requesting benefits during the week ended Feb. 26 rose by 7,000 to a seasonally adjusted 398,000. The Labor Department is scheduled to release the report at 8:30 a.m. EST Thursday.

Applications below 425,000 tend to signal modest job growth. But they would need to dip consistently to 375,000 or below to indicate a significant decline in the unemployment rate. Applications for benefits peaked during the recession at 651,000.

In early February, applications fell to 385,000, their lowest level in nearly three years. Much of that drop was due to snowstorms that closed government offices and made it more difficult for laid-off workers to seek benefits.

Applications rebounded the following week to 413,000, and then fell to 391,000 last week.

That pushed the four-week average, a less volatile measure, down to 402,000 last week, the lowest level in more than two and a half years.

The economy is strengthening but growth isn't fast enough to significantly lower the unemployment rate, now at 9 percent.

Economists predict the unemployment rate edged up to 9.1 percent in February. Employers are expected to add 175,000 new jobs during the month. That would mark an improvement from an anemic 36,000 in January when snowstorms and bad weather hurt job gains. The government releases the employment report for February on Friday.

The economy needs to produce at least 200,000 a month on a consistent basis to steadily reduce unemployment.

Economists in an AP Economy Survey, released earlier this year, predicted employers will create a net total of 2.2 million jobs this year. That would be double the number generated last year.

[Associated Press]

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