Yet 4-week average falls to lowest level since September 2008
By Jeffry Bartash, MarketWatch
WASHINGTON (MarketWatch) — The number of workers who filed new claims for unemployment benefits fell by 2,000 last week to 439,000, reflecting little change in a weak U.S. jobs market, according to the latest government data.
Jobless claims plummeted in 2009 as the economy exited recession, but they have clung near 450,000 through the first 11 months of this year. Economists believe weekly claims have to move toward 400,000 to indicate a faster pace of hiring.
Economists polled by MarketWatch had expected initial claims to rise to a seasonally adjusted 445,000 in the week ended Nov. 13. In 2010, claims have ranged from a high of 504,000 to a low of 427,000.
The four-week average of new claims, however, continued to decline and fell to its lowest level since September 2008. It dropped by 4,000 to 443,000. The moving average smooths out quirks in the weekly data and is considered a more accurate gauge of employment trends.
Economists say hiring is unlikely to accelerate until the U.S. starts growing rapidly and businesses gain more confidence in the recovery. The U.S. grew at a mediocre 2% rate in the third quarter, based on the government’s initial estimate. The economy is forecast to expand at a modestly faster 2.5% clip in the final three months of 2010.
Newly resurgent Republicans, victorious in the November elections, say they will push measures to boost the economy when they take control of the House of Representatives in January. They’ve urged additional tax reductions for business, streamlined regulations and relief from lawsuits, among other things. The Senate will remain in Democratic hands.
Yet before a divided Congress can consider new measures, Democrats and Republicans have to decide what to do about Bush-era tax cuts set to expire at year end. Economists say the recovery could falter if taxes rise in January.
Earlier this week, Treasury Secretary Timothy Geithner said it would be irresponsible for Congress to leave town before they reach a compromise. Democrats favor a partial extension of the tax cuts, while Republicans want to make them permanent for everyone.
In the week ended Nov. 6, meanwhile, the government said 4.3 million jobless workers continued to receive benefits under regular state unemployment programs, a decline of 48,000 from the prior week. The four-week average of continuing claims fell by 45,000 to 4.35 million. The data is seasonally adjusted.
The government paid extended federal benefits to 4.93 million people in the week ended Oct. 30, up 121,000 from the prior week. Extended benefits up to 99 weeks are offered in the states hardest hit by the 2007-2009 recession. They are tacked on to state benefits, which typically expire after six months.
Federal benefits will start to run out by the end of 2010. The nearly 5 million Americans who now receive those benefits could lose them next year if Congress fails to renew them.
About 8.85 million people received some kind of state or federal benefit in the week ended Oct. 30. That was down 145,400 from the prior week. The data is unadjusted.
