Ahead of the Bell: Drop in jobless claims expected

WASHINGTON - Government data to be released Thursday is expected to show that the number of new unemployment benefit claims filed last week remains at recessionary levels.

The Labor Department's tally of new claims for unemployment insurance for the week ending Oct. 4 is expected to fall by 19,000 from the previous week to a seasonally adjusted level of 478,000, according to a survey of Wall Street economists by Thomson/IFR.

The data is scheduled to be released Thursday at 8:30 a.m. EDT.

Last week's figure of 497,000 was the highest since just after the Sept. 11 terrorist attacks seven years ago, due to the weak economy and the impact of Hurricanes Ike and Gustav. The total was the second highest since 1992.

The hurricanes added approximately 45,000 claims to the total, the Labor Department said.

While economists expect improvement in Thursday's report, most remain pessimistic about jobs and the economy. Jobless claims above 400,000 are considered a sign of a recession.

Thursday's report is also expected to show that the total number of people continuing to draw benefits increased slightly to 3.6 million from 3.59 million. Continuing claims have remained at nearly five-year highs for several weeks.

The housing slump and credit crisis have led consumers to cut back on their spending, causing the economy to slow in recent months.

The Labor Department said in a separate report last week that the economy shed jobs at its fastest pace in five years in September.

Employers cut 159,000 jobs last month, the ninth straight month of reductions. Companies have eliminated 760,000 jobs so far this year.

The unemployment rate remained at 6.1 percent in September, up from 5.7 percent in July and 4.7 percent a year ago.

The financial crisis will likely cause greater job cuts in the coming months as several large, troubled banks have been bought by competitors and layoffs are likely.

Several companies have announced layoffs in the past week, including eBay Inc., Kraft Foods Inc. and MetLife Inc.

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