Sunday, November 7, 2010

Jobless claims surge to 457,000

Jobless claims surge to 457,000

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More than 450,000 Americans filed for first-time unemployment insurance last week, a discouraging sign ahead of the government's highly anticipated monthly jobs report due Friday.

The number of first-time filers for unemployment benefits surged to 457,000 in the week ended Oct. 30, up 20,000 from the week before, the Labor Department reported Thursday.

The number was higher than economists' forecasts of 445,000, according to consensus estimates by Briefing.com, and it fell in a range that analysts say points to continued weakness in the job market.

"Everyone would like to see the labor market improve faster, but with the overall economy growing slowly, recent claim statistics suggest there has been little improvement in the labor market," said Zach Pandl, economist with Nomura Securities.

Economists say they're looking for initial claims to fall to 400,000 or lower before they can say a jobs recovery has made noteworthy progress.

Overall, the weekly number has been stuck in a tight range since last November, hovering in the mid to upper 400,000s and even ticking slightly above 500,000 in mid-August.

The four-week moving average, calculated to smooth out volatility, totaled 456,000, up 2,000 from the previous week's revised average of 458,750.

The number of people continuing to file unemployment claims for a second week or more fell to 4,340,000 during the week ended Oct. 23, the most recent data available. That's down 42,000 from a revised 4,382,000 the week before.

Meanwhile, Congress is gearing up for a battle on extending federal unemployment benefits. About two million people are at risk of running out of the federal safety net next month, if Congress doesn't vote to extend the application deadline beyond Nov. 30.

Federal jobless payments, which last up to 73 weeks, kick in after the state-funded 26 weeks of coverage expire. These federal benefits are divided into tiers, and the jobless must apply each time they move into a new tier.

Jobless claims in eight states rose by more than 1,000 in the week ended Oct. 23. Claims in California rose the most -- by 3,755 -- which the state attributed to layoffs in forestry, fishing and agriculture.

On Friday, Wall Street will turn its attention to the government's closely-watched monthly labor report.

Economists polled by Briefing.com forecast the report to show the economy added 60,000 jobs in October, an improvement over the 95,000 jobs lost the month before. The unemployment rate is expected to remain at 9.6%.

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