Jobless claims hold steady at elevated level

Corporate America cuts back

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NEW YORK (CNNMoney.com) -- The number of Americans filing new claims for unemployment insurance did not change from last week, remaining at an elevated level that indicates weakness in the nation's economy.

The U.S. Department of Labor reported Thursday that initial filings for state jobless benefits rested at a seasonally adjusted 479,000 for the week ended Oct. 25.

Economists surveyed by Briefing.com expected the number to fall to 473,000 from the initially reported 478,000. Last year, there were 332,000 Americans filing new unemployment claims.

The Labor Department reported that there were 7,400 unemployment claims related to the effects of Hurricane Ike in Texas, down from the 12,000 such claims last week.

Ian Shepherdson, economist at High Frequency Economics, had hoped the fading of the impact of Ike would allow unemployment claims to fall.

Shepherdson said the fact that claims held steady shows a labor market in decline.

"There can be no question that the labor market is deteriorating; the only issue is the speed of the decline and the eventual peak in unemployment," he wrote in a note.

He said the national unemployment rate could reach 8.5%. It currently stands at 6.1%.

The four-week average of jobless claims, which smoothes out fluctuations fell to 475,500 from the week before. Last year, the average stood at 329,750.

A level of more than 400,000 was present throughout the last two recessions.

The number of American workers continuing to collect benefits for more than one week decreased by 12,000 to 3,715,000 for the week ended Oct. 18, the most recent data available. A year ago, there were 2,598,000 Americans continuing to collect benefits.

Four weeks prior, unemployment claims spiked to 499,000, the highest level recorded since the 517,000 claims filed in the wake of the Sept. 11 terrorist attacks.

Earlier this month, Labor Department reported net payroll nationwide declined by 159,000 in September, the ninth straight month the economy lost jobs.