Weekly Jobless Claims Unexpectedly Edge Up To Seven-Year High

(RTTNews) - Thursday morning, the Department of Labor released its report on initial jobless claims in the week ended September 27th, showing that claims unexpectedly increased. With the increase, jobless claims rose to their highest level in seven years.

The report showed that jobless claims edged up to 497,000 from the previous week’s revised figure of 496,000. Economists had expected jobless claims to fall to 475,000 from the 493,000 originally reported for the previous week.

With the unexpected increase, jobless claims rose to their highest level since the weeks following the September 11th attacks. In the week ended September 29, 2001, initial jobless claims came in at 517,000.

However, the Labor Department noted that the effects Hurricane Gustav in Louisiana and the effects of Hurricane Ike in Texas added approximately 45,000 claims to the total.

The report showed that the less volatile four-week moving average rose to 474,000 from the previous week’s unrevised average of 462,500.

The Labor Department added that continuing claims in the week ended September 20th rose to 3.591 million from the preceding week’s revised level of 3.543 million.

The data has raised some concerns about the Labor Department’s monthly employment report due to be released on Friday. Economists currently expect the report to show that employment fell by about 100,000 jobs in September, marking the ninth consecutive month of job losses.

After rising to a nearly five-year high of 6.1 percent in August, the unemployment rate is expected to remain unchanged in September. The unemployment rate has not been higher since it reached 6.2 percent in July of 2003.

Wednesday morning, Automatic Data Processing, Inc. (ADP) released its report on private sector employment in the month of September, showing that the private sector lost far fewer jobs than economists had been anticipating.

The report showed that non-farm private employment fell by 8,000 jobs in September following a revised decrease of 37,000 jobs in August. Economists had been expecting a decrease of about 53,000 jobs compared to the decrease of 33,000 jobs originally reported for the previous month.

ADP noted that the report does not reflect the impact of a strike by some 37,000 machinists against Boeing (BA) or job losses related to the hurricanes that struck the Gulf Coast. The company said those two factors might have further depressed employment in September.

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