(RTTNews) - First-time claims for unemployment benefits increased by much more than expected in the week ended October 17th, according to a report released by the Labor Department on Thursday, with the increase in jobless claims likely to lead to renewed concerns about the labor market.

The report showed that jobless claims rose to 531,000 from the previous week’s revised figured of 520,000. Economists had been expecting jobless claims to edge up to 515,000 from the 514,000 originally reported for the previous week.

However, Peter Boockvar, equity strategist for Miller Tabak, noted, “The Columbus day holiday last week may have influenced the data even though the numbers are seasonally adjusted.”

At the same time, the Labor Department said that the less volatile four-week moving average edged down to 532,250 from the previous week’s revised average of 533,000.

Continuing claims, which measure the number of people receiving ongoing unemployment help, also fell in the week ended October 10th, the latest week for which the government has data.

The report showed that continuing claims fell to 5.923 million from the preceding week’s revised level of 6.021 million.

While the Labor Department also said that those receiving Emergency Unemployment Compensation (EUC) increased by about 41,000 to 3.390 million, those receiving extended benefits fell by about 16,000 to 465,000.

Boockvar said, “It’s too early to say whether the fall in Extended Benefits (which extends past EUC payments) is due to the expiration of all benefits or because people are finding new jobs.”

“The monthly payroll data will better answer that question, but with a still sluggish hiring environment we can assume more are running out of benefits and its the reason why Congress is debating on extending them further,” he added.

Earlier this week, Senate Democrats called on their Republican colleagues to stop blocking an extension of unemployment insurance benefits.

Estimating that nearly 2 million people will lose their benefits by the end of the year if the benefits are not extended, Sen. Jack Reed, D-R.I., said the matter was urgent.

“Slow-walking these benefits doesn’t just hurt individuals and families; it is bad for businesses and the broader economy,” Reed said. “Helping people stay afloat is not a partisan issue — It is an urgent national issue that demands action now.”

The Congressional Budget Office estimates that for each dollar spent on unemployment insurance it generates $1.65 in new economic demand. Sen. Jeanne Shaheen, D-N.H., picked up on that argument in urging GOP senators to waive their objections to the extension bill.

“The unemployment extension bill before the Senate is a great bill - one that will stimulate the economy and help unemployed workers across the country struggling to get back on their feet,” Shaheen said.

“Helping people who are about to lose a lifeline is the essence of what we do as public servants - that is why this delay is so disappointing,” she added.

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Posted in Categories: Economy, Forex, Releases, USA.

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