Jobless claims dent recovery hopes
Initial claims jump 11,000 to 531,000, much more than expected. Filings had fallen five of the past six weeks.
NEW YORK (CNNMoney.com) -- The number of first-time filers for unemployment insurance rose last week, snapping two weeks of significant declines, according to a government report issued Thursday.
There were 531,000 initial jobless claims filed in the week ended Oct. 17, up 11,000 from an upwardly revised 520,000 the previous week, the Labor Department said in a weekly report. The week included the Columbus Day holiday.
A consensus estimate of economists surveyed by Briefing.com expected 515,000 new claims.
"[The initial claims figure] is somewhat surprising," wrote Jim Baird analyst at Plante Moran Financial Advisors, in a research note. "Excess slack in the system and employers' hesitance to ramp up hiring appear likely to weigh on the labor markets for some time."
The 4-week moving average of initial claims was 532,250, down 750 from the previous week's revised average of 533,000.
New jobless claims had declined for five of the last six weeks, falling sharply in the first two weeks of October. Earlier this month, initial claims fell to their lowest level since January.
Continuing claims: The government said 5,923,000 people filed continuing claims in the week ended Oct. 10, the most recent data available. That was down 98,000 from the preceding week's ongoing claims, and would -- if not revised -- mark the first time since late March that continuing claims were below 6 million.
The 4-week moving average for ongoing claims fell by 59,250 to 6,030,750, from the prior week's revised average of 6,090,000.
But the slide in continuing claims may signal that more filers are falling off those rolls and into extended benefits.
Continuing claims reflect people filing each week after their initial claim until the end of their standard benefits, which usually last 26 weeks. The figures do not include those who have moved to state or federal extensions, nor people who have exhausted their benefits.
Unemployment benefits. As more and more unemployed Americans find themselves with expired benefits, Congress is wrestling with legislation that would extend their lifeline. The House has approved a jobless benefits extension, but the Senate has not yet voted on it.
Earlier this month, Senate Democrats introduced a bill that would extend unemployment benefits by up to 14 weeks in every state. Those living in states with unemployment levels greater than 8.5% would receive a further six weeks.
Currently, states with rates above 8% now offer up to 79 weeks of benefits. States with rates between 6% and 8% now offer up to 59 weeks, and all other states currently offer up to 46 weeks.
State-by-state data: Only one state reported a decline in initial claims of more than 1,000 for the week ended Oct. 10, the most recent data available. Claims in California fell by 7,062, which a state-supplied comment attributed to fewer layoffs in the construction, trade, service and manufacturing sectors.
Eighteen states said that claims increased by more than 1,000. Florida reported the most new claims at 9,976; New York's jumped by 5,411; Wisconsin saw a rise of 4,999; Indiana's increased by 4,977; and Maryland's rose by 2,783.
Outlook: Although experts expect the U.S. economy grew in the third quarter, Plante Moran analyst Baird said Thursday's report leaves him concerned about future jobless figures.
"Despite the relatively steady improvement in weekly claims since April, this also suggests that the employment market remains weak," Baird said.
As "stimulative programs" like Cash for Clunkers and the $8,000 first-time home buyer tax credit wind down, Baird said, the labor market could face even further pressure in the months ahead.