U.S. Jobless Claims Jump 32,000 to 493,000 Last Week

By Shobhana Chandra

Sept. 25 (Bloomberg) -- The number of Americans filing first-time claims for unemployment benefits rose last week to the highest since September 2001 as hurricanes kept residents of Texas and Louisiana out of work.

Initial jobless claims increased by 32,000 to 493,000 in the week that ended Sept. 20, from a revised 461,000 the prior week, the Labor Department said today in Washington. Economists in a Bloomberg survey had forecast a drop. Hurricanes Ike and Gustav added 50,000 claims, the department said.

The figures may reinforce concern that consumer spending, which accounts for more than two-thirds of the U.S. economy, will falter. Growth already is slowing during a housing slump and the worst financial crisis since the Great Depression.

``The labor market is clearly in recession,'' Steven Wood, president of Insight Economics LLC in Danville, California, said before the report.

Separately, orders for U.S. durable goods fell more than twice as much as forecast in August, a sign that slower sales and tighter credit conditions prompted companies to cut spending.

Initial claims were forecast to decrease to 450,000 from 455,000 initially reported for the prior week, according to the median projection of 39 economists in a Bloomberg News survey. Estimates ranged from 433,000 to 505,000.

Weekly jobless claims figures in recent weeks have been distorted by the fallout from storms earlier this month.

Unemployment Rising

The four-week moving average of initial claims, a less volatile measure, increased 462,500 from 446,500, today's report showed.

The number of people continuing to collect jobless benefits rose close to a five-year high of 3.542 million in the week ended Sept. 13, from 3.479 million the prior week.

The unemployment rate among people eligible for benefits, which tends to track the jobless rate, stayed at 2.6 percent for a third straight week. These data are reported with a one-week lag.

Forty-one states and territories reported an increase in new claims, while 12 reported a decrease.

Initial jobless claims reflect weekly firings and tend to rise as job growth -- measured by the monthly non-farm payrolls report -- slows.

So far this year, weekly claims have averaged 384,700, compared with an average 321,000 for all of 2007.

Credit Crunch

The economy lost 605,000 jobs this year until August. The monthly payrolls report for September, due from the Labor Department on Oct. 3, may show job losses continued for the ninth consecutive month, according to the Bloomberg survey.

The credit crisis may spur more layoffs. The turmoil has pushed Lehman Brothers Holdings Inc. into bankruptcy, Merrill Lynch & Co. into an acquisition by Bank of America Corp., and led to a government takeover of mortgage financiers Fannie Mae and Freddie Mac, and of insurer American International Group Inc.

Slower sales of big-ticket items is prompting even foreign automakers to pare workers at their U.S. units. Bayerische Motoren Werke AG, the world's largest maker of luxury autos, on Sept. 18 said it'll eliminate 90 office jobs in North America because of slowing U.S. sales.

``We can no longer afford to just modify or cut back on the way in which we have been operating,'' Jim O'Donnell, president of BMW of North America LLC, said in an e-mail to dealers.

To contact the reporter on this story: Shobhana Chandra in Washington schandra1@bloomberg.net