Jobless claims

Jobless claimsThe number of people filing new claims for jobless benefits likely dipped last week for the third week in a row.

Wall Street economists expect claims will fall by 5,000 to a seasonally adjusted 448,000, according to a survey by Thomson Reuters. The Labor Department will issue the report at 8:30 a.m. EDT Thursday.

That would be the third-straight drop in claims, which are closely watched because they are considered a gauge of the pace of layoffs.

The decline in claims has been agonizingly slow, and has added to concerns that weak hiring could slow the recovery. Many economists believe sustained job gains won’t take place until claims fall below 425,000.

After falling steadily in the second half of last year, initial claims have been stuck at about the 450,000 level since the beginning of the year.

Last week, the Labor Department said the economy generated only 41,000 private-sector jobs in May, down from 28,000 in April and far fewer than analysts expected.

Temporary hiring by the Census Bureau added another 411,000 jobs, and the unemployment rate fell to 9.7 percent from 9.9 percent.

Meanwhile, economists expect the number of people continuing to claim benefits to drop by about 26,000 to 4.6 million.

But that doesn’t include about 5.4 million people receiving extended benefits, paid for by the federal government. Congress has added 73 weeks of extra benefits on top of the 26 weeks typically provided by states. All told, about 9.8 million people received unemployment insurance in the week ending May 15, the most recent data available.

The extended benefit program expired last week, and Congress is debating whether to continue it through the end of November. About 325,000 people will lose unemployment aid by the end of this week due to the cutoff, though their benefits will likely be restored if Congress approves an extension. That total will grow to 1.25 million by the end of the month if the extension isn’t passed, according to the Labor Department.

The economy is expanding, but at a weaker pace than in many previous recoveries. The Commerce Department said earlier this month that the nation’s gross domestic product ? the broadest measure of economic output ? grew at a 3 percent annual rate in the January-to-March quarter. That was down from the 5.6 percent pace in the fourth quarter of 2009.

After the last deep recession in the early 1980s, the economy grew at a pace of 7 percent to 9 percent for five straight quarters.
Source: The Associated Press.