Ahead of the Bell: Jobless Claims

AP News
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Posted: Dec 03, 2009 6:33 AM

The number of newly laid-off workers seeking unemployment benefits likely rose last week, after a steep drop.

A Labor Department report is projected to show new unemployment insurance claims rose by 14,000 to a seasonally adjusted 480,000 last week, according to economists surveyed by Thomson Reuters.

The previous week's figure of 466,000 was the lowest total since the week of Sept. 13, 2008.

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.

Claims have steadily declined from a peak of 674,000 this spring. That indicates firings are decreasing, but 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 20,000 to 5.4 million for the week ending Nov. 21. Those figures lag initial claims by a week.

But the continuing claims do 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 4.2 million people were receiving extended benefits in the week ended Nov. 14, the latest data available. That's a drop of about 18,000 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 last month. 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, according to the National Employment Law Project.

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 2.8 percent annual rate in the July-September quarter. That was not as strong as first reported, but still broke a record string of four straight quarterly declines.

Gannett Co. this week said it was cutting 26 newsroom jobs at its flagship USA Today newspaper and eliminating 11 positions at USA Weekend magazine. Another media company, the Greenspun Media Group, which publishes the Las Vegas Sun, announced it was reorganizing its operations in a cost-cutting move and would lay off an unspecified number of workers.