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U.S. Initial Jobless Claims Rose More Than Forecast Last Week

• Bloomberg

The number of people collecting benefits fell, while those receiving extended benefits increased.

Economists project the unemployment rate will reach 10 percent by the first quarter of 2010, underscoring the risk to consumer spending, the biggest part of the economy. Companies cutting costs remain reluctant to hire, even as they’ve eased dismissals from levels seen earlier this year.

“Jobs are still a concern,” Tim Quinlan, an economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said before the report. “The job market remains the weak spot in this recovery. There are still further layoffs to come.”

Extended Payments

Continuing claims decreased by 98,000 in the week ended Oct. 10 to 5.92 million, in part reflecting those that have used all their benefits without finding another job.

Those figures don’t include Americans receiving extended benefits under federal and state programs. The number of people collecting extended payments climbed to 3.86 million in the week ended Oct. 3 from 3.83 million a week earlier, today’s report showed.

Forty-nine states and territories reported an increase in claims, while 4 reported a decrease. Florida led states showing a gain with a jump of 9,976 that reflecting more firings in construction, services and manufacturing. These data are reported with a one-week lag.

Initial jobless claims reflect weekly firings and tend to rise as job growth -- measured by the monthly non-farm payrolls report -- slows.

Legislation Stalled

Legislation to extend unemployment benefits is stalled in the Senate amid a partisan dispute over issues such as how to finance the plan.

Republicans are blocking the measure that would extend payments by as much as 20 weeks because they want votes on several amendments, including on how to pay for the $2.4 billion measure so it doesn’t add to the federal budget deficit. Democrats plan to finance the aid by extending an employer payroll surtax due to expire at the end of this year.

Unemployment rose in 23 U.S. states in September and hit records in Nevada, Rhode Island and Florida, the Labor Department reported yesterday.


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