The US Department of Labor reported that initial jobless claims for the week ending Oct. 3, 2009 dropped to 521,000, the lowest level since January.
For four out of five weeks new claims have declined, indicating that employers are laying off fewer workers as the economy begins to show signs of recovery. Still, employers remain reluctant to hire new workers and the unemployment rate is expected to continue climbing well into 2010.
Jobs pundits were expecting to see 540,000 layoffs last week, making the seasonally adjusted 521,000 claims actually reported look good.
The four-week average of initial claims fell to 539,750, its lowest level since January 17,2009. The four-week figure smooths out jobs data and is more closely watched by Wall Street.
Continuing claims fell by 72,000 to 6.04 million. The street expected a mild increase.
The September unemployment rate rose to 9.8%, up 0.1% over August and is expected to continue rising to over 10% until sometime in the second half of next year. Since the recession began, over 7 million Americans have lost their jobs and Congress has been forced to extend benefits 53 extra weeks on top of the 26 weeks provided by States. The likelihood of further federal benefit extensions remains high.
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