Ahead of the Bell: Jobless Claims

The number of newly laid-off workers seeking unemployment benefits likely dropped slightly last week, evidence that the job market is slowly improving as the economy recovers from the worst recession since the 1930s.

A Labor Department report is projected to show new unemployment insurance claims dropped by 7,000 to a seasonally adjusted 523,000 last week, according to economists surveyed by Thomson Reuters. That would continue a downward trend that has seen claims drop in six of the past eight weeks.

The four-week average, which smooths out fluctuations, dropped to 526,250 last week. The eighth straight decline left claims about 132,000 below the peak reached this spring.

Economists closely watch initial claims, which are considered a gauge of layoffs and an indication of companies' willingness to hire new workers.

The unemployment benefit rolls, meanwhile, are expected to drop by about 50,000 to 5.7 million for the week ending Oct. 24. The figures on continuing claims lag initial claims by a week.

The report is due Thursday at 8:30 a.m. EST.

When federal emergency programs are included, the total number of jobless benefit recipients dropped by about 100,000 to 8.9 million in the week ending Oct. 10, the latest data available.

Congress has added up to 53 extra weeks of benefits on top of the 26 typically provided by the states, and is considering adding another 14 to 20 weeks.

The unemployment rate rose to 9.8 percent in September from 9.7 percent, the department said earlier this month, as employers cut 263,000 jobs.

Economists expect the rate to rise to 9.9 percent when the October figure is announced Friday, as employers are projected to have cut 175,000 jobs.

More job cuts were announced this week. Software giant Microsoft Corp. said Wednesday that it will eliminate 800 jobs, on top of the 5,000 layoffs it announced in January.

And health products maker Johnson & Johnson said Tuesday it could eliminate as many as 8,300 jobs as part of an effort to save up to $900 million next year.

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