By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — The number of people who signed up for state unemployment benefits jumped 13,000 to 462,000 in the latest week, the federal government reported, signaling no improvement in a weak U.S. jobs market.
Economists polled by MarketWatch had expected initial claims to fall to a seasonally adjusted 444,000 in the week ended Oct. 9. Claims for last week were revised up by 4,000 to 449,000, according to Labor Department data.
Because of a federal holiday on Monday, Labor used estimates for five states, including Texas, Virginia and Washington, D.C.
A more accurate gauge of employment trends is the four-week average of initial claims, which is less volatile than the weekly number. The moving average rose 2,250 to 459,000.
Continuing claims, which reflect workers already receiving unemployment checks, dropped 112,000 to 4.4 million in the week ended Oct. 2. The four-week average of continuing claims decreased 34,000 to 4.49 million.
Holding pattern
After spiking above 500,000 in midsummer, new applications for unemployment compensation have fallen back to the 450,000 range, a level historically associated with sluggish growth.
Most economists believe weekly claims have to start trending down toward 400,000 as evidence that hiring is on the upswing. So far there is little evidence in claims or the monthly jobs report to indicate such a trend is underway.
In September, for example, the U.S. added just 65,000 private-sector jobs, less than half the number required on a monthly basis to lower the nation’s 9.6% unemployment rate.
Most companies won’t expand payrolls until demand for goods and services increase and they see clear evidence that the economy is gaining steam.
Yet the U.S. likely expanded at a sluggish 2.0% pace in the third quarter, just slightly above second-quarter growth of 1.7%, according the MarketWatch survey. The economy expanded at a 3.7% clip the first three months of 2010.
With so many people out of work, the federal government has offered extended benefits of up to two years in the states hardest hit by the recession. The U.S. spent $160 billion in jobless benefits in the fiscal 2010, nearly quadruple what it spent just two years earlier.
Almost 4.8 million people received extended federal benefits in the week ended Sept. 25, down more than 340,000 from the prior week.
Altogether, 8.65 million people were getting some kind of benefit in the week ended Sept. 25, the latest data available. That was down from 9.02 million.
Lawmakers won’t take any further action until after the Nov. 2 congressional elections. The Federal Reserve is widely expected to take additional steps to keep interest rates low, but rates are already at or near historic lows. It’s unclear whether the central bank’s action would have much effect.
