Unemployment claims rise unexpectedly

By Hibah Yousuf, staff reporter


NEW YORK (CNNMoney.com) -- The number of Americans filing for initial unemployment insurance rose last week, the government said Thursday. Analysts had expected a decline.

There were 480,000 initial job claims filed in the week ended Dec. 12, up 7,000 from the previous week's revised 473,000, the Labor Department said.

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A consensus estimate of economists surveyed by Briefing.com expected claims to decline to 465,000.

The 4-week moving average of initial claims totaled 467,000, down 5,250 from the previous week's revised average of 472,750.

This marks the second consecutive week that claims have climbed. But weekly claims have proven to be volatile with some pops but overall maintaining a downward trajectory. Analysts say that's normal for this time of year.

"With all the seasonal factors in play at this time of year, I'm not going to get too concerned over a couple of weeks of increases," said Robert Dye, senior economist at PNC Financial Services Group. "I expect the downward trend to steadily continue, but it wouldn't surprise me if we get another erratic week or two."

Continuing claims: The government said 5,186,000 people filed continuing claims in the week ended Dec. 5, the most recent data available. That's 5,000 up from the preceding week's revised 5,181,000 claims.

The 4-week moving average for ongoing claims fell by 106,750 to 5,318,250 from the previous week's revised 5,425,000.

But the slide may signal that more filers are dropping off those rolls 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, or people whose benefits have expired.

Congress passed legislation last month to extend federally paid benefits up to 99 weeks, depending on the state, but the law only helps those who exhaust the unemployment lifelines by the year's end.

Lawmakers in the House passed a measure Wednesday to extend the filing deadline through the end of February. Both chambers initially introduced bills to push the deadline to apply for benefits through 2010 or beyond, but democratic leaders in the House scaled back the effort in hopes of getting the bill through the Senate more quickly.

State-by-state: Jobless claims in two states declined by more than 1,000 for the week ended Dec. 5, the most recent data available. Claims in Kansas state dropped the most, by 3,803.

A total of 29 states said the claims increased by more than 1,000. Claims in California jumped by 28,358, which a state-supplied comment said was due to the return to a 5-day work week following the Thanksgiving holiday and layoffs in the construction and services industries.

Dour outlook: Dye said the recent increases will not sustain a rebound, and the underlying downward trend will continue.

He added that layoffs in construction industry will taper in the coming weeks since Congress passed a measure in November to extend and expend the homebuyer's tax credit last month.

"I don't want to put too much weight on one or two weeks of movement," he said. "We've seen steady improvements, and I expect the overall improving trend to continue."  To top of page

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