Associated Press//November 18, 2010
//November 18, 2010
WASHINGTON — The number of people applying for unemployment benefits barely rose last week, offering some hope that the job market may be improving. But claims need to fall further to bring down the 9.6 percent unemployment rate.
Initial claims for jobless aid increased by 2,000 to a seasonally adjusted 439,000, the Labor Department said Thursday. Still, claims have fallen below 440,000 in three of the past four weeks and remain near their lowest level in two years.
And the four-week average of claims, a less-volatile measure, fell for the fourth time in five weeks to 443,000. That’s the lowest level for the average since September 2008. The average has fallen by almost 20,000, or 4.2 percent, in the past five weeks.
The downward trend in both figures suggests companies are laying off fewer workers and some hiring is taking place. Still, most economists say claims need to drop below 425,000 to signal that hiring is really ramping up.
“The data on jobless claims continues to look encouraging as initial claims held at a relatively low level,” said Daniel Silver, an economist at JPMorgan Chase.
Separately, a gauge of future economic activity grew in October for the second straight month, suggesting that the economy may pick up early next year.
The Conference Board, a private research group, said its index of leading economic indicators increased 0.5 percent last month, the same reading as in September. The latest increases are the fastest since May.
The weekly jobless claims figures provide a real-time snapshot of the job market. They closely track layoffs, which have dropped steadily in the past year, and indicate whether companies are hiring.
Claims have dropped by 16,000 in the past month. That indicates that the economy likely generated a net gain of jobs in November, similar to October’s gain of 151,000, economists said. But gains at that pace aren’t enough to rapidly bring down the jobless rate, which has been at 9.6 percent for three months.
The number of people continuing to claim unemployment aid fell by 48,000 to just under 4.3 million for the week ending Nov. 6, the department said. That doesn’t include millions of additional people on extended unemployment programs that were set up during the recession.
Overall, about 8.85 million people are receiving jobless aid, including 4.7 million that are doing so through the federally funded extended benefit programs. Those provide up to 99 weeks of benefits.
But the extended programs are set to expire at the end of this month. Up to 2 million people will lose benefits in December if the program isn’t extended, and another 2 million will run out this winter, the National Employment Law Project, a nonprofit group, estimates.
The House is scheduled to vote later Thursday on a bill that would extend the program for three months. But it isn’t clear if the bill will pass the House and Senate before Congress adjourns later this month.n