By Timothy R. Homan Oct. 16 (Bloomberg) -- Initial jobless claims in the U.S. fell last week as job losses related to the Gulf Coast hurricanes subsided, while total benefit rolls rose to the highest level in five years. Initial jobless claims declined by 16,000 to 461,000 in the week that ended Oct. 11, fewer than forecast, from a revised 477,000 the prior week, the Labor Department said today in Washington. Some state offices were closed during the Columbus Day holiday last week, prompting the government to estimate claims in eight states, a Labor spokesman said. Job losses are constraining consumer spending and deepening the economic slump. Tighter credit conditions, which led the government to announce plans to inject capital into banks, are making it harder for those companies looking to expand to increase payrolls. ``These jobless claims are pretty elevated and squarely in the recession camp,'' John Ryding, chief economist at RDQ Economics in New York, said in an interview with Bloomberg Television. Initial claims were projected to decrease to 470,000 from 478,000 initially reported for the prior week, according to the median projection of 39 economists in a Bloomberg News survey. Estimates ranged from 445,000 to 500,000. A separate report showed prices paid by consumers were unchanged in September, less than the 0.1 percent increase forecast and indicating that the threat of inflation is diminishing as the economy slows. Excluding food and fuel, so- called core prices rose 0.1 percent, also less than anticipated. Treasuries were lower, pushing yields up. The benchmark 10- year note yielded 4.01 percent as of 8:35 a.m. in New York, up 6 basis points from yesterday. Stock futures were higher. Hurricane Influence Claims in Louisiana are no longer being pushed higher by last month's storms, while 12,000 claims in Texas were still attributed to job losses related to the hurricanes, Labor said. The four-week moving average of initial claims, a less volatile measure, rose to 483,250, the highest since the 2001 recession, from 482,500. So far this year, weekly claims have averaged 392,000, compared with an average 321,000 for all of 2007. The number of people continuing to collect jobless benefits climbed to 3.711 million in the week ended Oct. 4, the most since June 2003, from 3.671 million the prior week. The unemployment rate among people eligible for benefits, which tends to track the jobless rate, rose to 2.8 percent from 2.7 percent. These data are reported with a one-week lag. Forty-two states and territories reported an increase in new claims, while 11 reported a decrease. The total decline in payrolls this year reached 760,000 in September, the Labor Department said Oct. 3. Battleground States Claims jumped in three so-called battleground states, those where presidential election polls show a close race, in the first week of the month. Firings among automakers pushed up applications in Ohio and Michigan, while the slump in construction contributed to a rise in Florida. PepsiCo Inc., the world's largest snack maker, said this week it will cut 3,300 jobs after drink sales in the U.S. and Canada decreased 3 percent last quarter. To contact the reporter on this story: Timothy R. Homan in Washington at thoman1@bloomberg.net

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