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Government data are expected to show that new jobless claims edged up last week while the total number of people receiving unemployment insurance set a record for the 11th straight week. The nation’s job market is expected to remain weak into next year as companies purge thousands more workers.
The Labor Department’s tally of initial unemployment benefit claims is forecast to rise to a seasonally adjusted 655,000 from the previous week’s 654,000, according to a survey of Wall Street economists by Thomson Reuters. Continuing claims, meanwhile, are forecast to jump to 5.89 million from 5.84 million. That would be the highest total on records dating to 1967.
The 674,000 new claims reported two weeks ago was the highest in the current recession and the most in 26 years, though the labor market has grown by half since then.
The report is scheduled to be released Thursday at 8:30 a.m. EDT.
Initial jobless claims reflect the pace of layoffs by companies and are considered a timely, if volatile, measure of the economy.
Time Market Data by XigniteEmployers have cut 5.1 million jobs since the recession began in December 2007 in an effort to slash costs as consumers and businesses have sharply reduced spending. The department said earlier this month that companies cut a net total of 663,000 jobs in March, sending the unemployment rate to 8.5 percent, the highest in 25 years.
The Federal Reserve expects the unemployment rate will probably "rise more steeply into early next year before flattening out at a high level over the rest of the year," according to minutes from the central bank’s March meeting released earlier this month. Many private economists expect the rate will hit 10 percent by year’s end.
Fed Chairman Ben Bernanke and many private economists think the recession could end later this year, but traditionally the labor market doesn’t pick up until well after a recovery. And President Barack Obama this week said the recession is far from over.
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