Jobless Claims Fall More Than Expected But Remain Just Above 500,000

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First time claims for unemployment benefits fell by more than expected in the week ended November 7th, according to a report released by the Labor Department on Thursday, although claims remain just above the 500,000 level.

The report showed that initial jobless claims fell to 502,000 from the previous week's revised figure of 514,000. Economists had been expecting claims to edge down to 510,000 from the 512,000 originally reported for the previous week.

With the bigger than expected decrease, jobless claims extended a recent downward trend, falling to their lowest level since claims came in at 488,000 in early January, the last time claims were below 500,000.

The Labor Department also said that the less volatile four-week moving average edged down to 519,750 from the previous week's revised average of 524,250.

Additionally, the report showed that continuing claims, which measure the number of people receiving ongoing unemployment help, saw a notable decline in the week ended October 31, the latest week for which the government has data.

Continuing claims fell to 5.631 million from the preceding week's revised level of 5.770 million. With the decrease, continuing claims fell to their lowest level since March.

While the Labor Department also said that the number of people claiming emergency unemployment compensation (EUC) benefits in the week ended October 24th rose about 22,000, those receiving extended benefits fell by about 28,000.

Commenting on the drop in those receiving extended benefits, Peter Boockvar, equity strategist for Miller Tabak, said, "It's unclear whether that fall off is due to new jobs being found or because benefits were exhausted."

He added, "With the extension of unemployment benefits now reaching 99 weeks, thus almost 2 years, as monthly job losses continue, we have to assume its due more to the exhaustion of benefits."

"Bottom line, the trend continues of a moderation in the pace of firings with the level of hiring's being more uncertain," Boockvar said.

Last Friday, President Barack Obama signed the Worker, Homeownership, and Business Assistance Act of 2009 into law, with the legislation extending unemployment benefits by up to 20 weeks.

Under the bill, everyone will receive 14 weeks of additional benefits, and those living in states with unemployment greater than 8.5 percent will receive an additional six weeks on top of that.

On the same day, the Labor Department released a report showing that employment fell by more than expected in the month of October, with the continued decrease in jobs pushing the unemployment rate up to a new twenty-six year high above 10 percent.

The report showed that non-farm payroll employment fell by 190,000 jobs in October following a revised decrease of 219,000 jobs in September. Economists had expected a decrease of about 175,000 jobs compared to the loss of 263,000 jobs originally reported for the previous month.

With the continued drop in jobs, the unemployment rate jumped to 10.2 percent in October from an unrevised 9.8 percent in September. The unemployment rate had been expected to show a more modest increase to 9.9 percent.

The bigger than expected increase lifted the unemployment rate to its highest level since a matching rate in April of 1983.

First time claims for unemployment benefits fell by more than expected in the week ended November 7th, according to a report released by the Labor Department on Thursday, although claims remain just above the 500,000 level. The report showed that initial jobless claims fell to 502,000 from the previous week's revised figure of 514,000. Economists had been expecting claims to edge down to 510,000 from the 512,000 originally reported for the previous week. (Market News Provided by RTTNews)