Ahead of the Bell: Jobless claims

Wall Street economists expect first-time jobless claims to resume decline

• On 6:37 am EDT, Thursday October 29, 2009

WASHINGTON (AP) -- The number of newly laid-off workers seeking unemployment benefits likely dropped last week, a sign the labor market is improving a bit as job cuts ease and the economy slowly recovers from the worst recession since the 1930s.

A Labor Department report is projected to show new unemployment insurance claims dropped by 10,000 to a seasonally adjusted 521,000 last week, according to economists surveyed by Thomson Reuters.

That would largely reverse a rise in claims of 11,000 in the previous week, and resume a downward trend that saw claims drop five out of six weeks in September and earlier this month.

Economists closely watch initial claims, which are considered a gauge of layoffs and an indication of companies' willingness to hire new workers.

The four-week average of claims, which smooths out fluctuations, dropped to 532,250, according to last week's report. That's about 125,000 below its peak for the current recession, reached this spring.

Employers have cut jobs every month since January 2008, eliminating 7.2 million positions.

The unemployment benefit rolls, meanwhile, are expected to drop by about 20,000 to 5.9 million for the week ending Oct. 17.

The figures on continuing claims lag initial claims by a week.

The government also is expected to report that the nation's economy grew at a 3.3 percent annual rate in the July-September period, ending a record streak of four straight quarterly declines.

Both reports are due out Thursday at 8:30 a.m. EDT.

When federal emergency programs are included, the total number of jobless benefit recipients dropped to 8.8 million in the week ending Oct. 3, the latest data available, down about 50,000 from the previous week.

Congress has added up to 53 extra weeks of benefits on top of the 26 typically provided by the states, and is considering adding another 14 to 20 weeks.

The large number of people remaining on the rolls shows unemployed workers are having a hard time finding new jobs.

The unemployment rate rose to 9.8 percent in September from 9.7 percent, the department said earlier this month, as employers cut 263,000 jobs.

More job cuts were announced this week. Apparel maker Hanesbrands Inc. said Tuesday that it is shutting a hosiery plant in Winston-Salem, N.C., and laying off 240 employees.

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