Ahead of the Bell: Jobless Claims
WASHINGTON — Economists expect the number of newly laid-off workers seeking unemployment benefits fell slightly last week as job cuts continue to slowly decline.
Still, many economists worry the nation could be in for a “jobless recovery” as the unemployment rises despite some overall economic growth in the third quarter.
A Labor Department report is projected to show new unemployment insurance claims dropped by 2,000 to a seasonally adjusted 510,000 last week, according to economists surveyed by Thomson Reuters. That would be the lowest total since early January.
Claims have declined since this spring. The four-week average, which smooths out fluctuations, fell to 523,750 last week, its ninth straight drop and about 135,000 below the peak reached in early April.
Economists closely watch initial claims, which are considered a gauge of layoffs and an indication of companies’ willingness to hire new workers. Many analysts estimate that claims will need to fall to roughly 450,000 to signal that the economy is adding jobs.
The number of people continuing to claim benefits, meanwhile, is expected to drop by about 50,000 to 5.7 million for the week ending Oct. 31. The figures on continuing claims lag initial claims by a week.
The report is due Thursday at 8:30 a.m. EST.
Millions of unemployed Americans have used up the regular 26 weeks of benefits typically provided by states, and are receiving extended benefits for up to 73 additional weeks, paid for by the federal government. Congress added 14 to 20 weeks to the extended program last week, the fourth extension since the recession began and the longest total extension on record.
About 4.1 million people were receiving extended benefits in the week ended Oct. 17, the latest data available, an increase of about 100,000 from the previous week.
Even as claims are falling and the economy has begun to grow, the unemployment rate is continuing to rise. It jumped to 10.2 percent in October from 9.8 percent, the highest in more than 26 years, the government said last week.
At the same time, the economy grew at a 3.5 percent annual rate in the July-September quarter. The disparity between the unemployment rate and economic growth figure has raised fears among many economists that the nation’s economy could be in for a “jobless recovery.”
More job cuts were announced this week. Adobe Systems Inc., the maker of Photoshop, Flash and Acrobat software products, said it will cut about 680 jobs, or 9 percent of its employees.
And internet company AOL LLC, which will soon be spun off from parent Time Warner Inc., laid off about 100 full-time employees, reducing its work force to 6,900.
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