The number of newly laid-off workers seeking unemployment benefits likely edged up last week, after falling by 30,000 in the previous two weeks.
New jobless claims have fallen steadily since this spring as layoffs have slowed from exceptionally high levels earlier this year. But claims remain above levels that most analysts think would indicate the economy is adding jobs.
A Labor Department report is projected to show new unemployment insurance claims rose by 3,000 to a seasonally adjusted 505,000 last week, according to economists surveyed by Thomson Reuters. Last week's figure was the lowest total since initial claims were 488,000 in the week ending Jan. 3.
The four-week average, which smooths out fluctuations, fell to 519,750 last week. That was the 10th straight drop and about 140,000 below the peak reached in early April.
Economists closely monitor initial claims, which are considered a gauge of the pace of layoffs and an indication of companies' willingness to hire new workers. The report is due Thursday at 8:30 a.m. EST.
While the steady decline in claims is evidence that firings are decreasing, most economists say weekly claims would have to fall to about 425,000 for several weeks to signal that the economy is actually adding jobs. Some economists put the number higher, around 475,000.
The number of people continuing to claim benefits, meanwhile, is expected to drop by about 30,000 to 5.6 million for the week ending Nov. 7. The figures on continuing claims lag initial claims by a week.
But the continuing claims figure does not include millions of people that 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.
About 4.1 million people were receiving extended benefits in the week ended Oct. 24, the latest data available. That's little changed from the previous week.
Congress added 14 to 20 weeks to the extended program Nov. 6, the fourth extension since the recession began and the longest total extension on record. That boosted the total number of weeks a person could collect unemployment to as much as 99 in the hardest-hit states.
But more than 1 million people will run out of unemployment benefits in January unless Congress quickly extends federal emergency aid, a nonprofit group said Wednesday. The November extension didn't address an underlying problem: The emergency unemployment compensation program, including all additional weeks, expires at the end of this year.
If the program isn't renewed, after Jan. 1 recipients who have used up their 26 weeks of state benefits won't get any extra coverage. The National Employment Law Project estimated Wednesday that 450,000 people will fall into that category in January and an additional 600,000 will run out of extended coverage that month and won't be eligible for more.
Even as claims are falling and the economy has started growing, the unemployment rate is continuing to rise. It jumped to 10.2 percent in October from 9.8 percent, the highest level in more than 26 years, the government said earlier this month.
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 could be in for a "jobless recovery."
More job cuts were announced this week. Hartford, Conn.-based Health insurer Aetna Inc. said it will cut 625 jobs, or nearly 2 percent of its staff, and will make a similar job cuts in the first quarter of 2010 due to the lagging economy and the potential impact of health care reform.
Cell phone handset maker Sony Ericsson said it will move its North American headquarters to Atlanta from Research Triangle Park, N.C., and close a half-dozen sites worldwide. The closures are part of a plan to cut 2,000 jobs, or 20 percent of its global work force.
Several state governments also announced layoffs, including Pennsylvania, Indiana and Maryland.