US jobless claims data shows small gains

 
City A.M. Reporter
New US claims for unemployment benefits rose modestly last week, but are hovering near levels normally associated with improving labour market conditions, in a hopeful sign for the struggling economy.

Initial claims for state jobless aid climbed 6,000 to a seasonally adjusted 401,000, the US Labor Department said, from 395,000 the prior week.

That left claims holding steady around the 400,000 mark, which is usually regarded as consistent with some improvement in the jobs market, for a second week.

Economists, who had expected claims to rise to 410,000, saw this as yet another sign the ailing economy was not falling back into recession.

"Claims suggest that layoffs remain contained despite high uncertainty in the economy. We continue to expect moderate growth rather than a recession," said Guy Berger, an economist at RBS in Stamford, Connecticut.

The data falls outside the survey period for the government's closely watched employment report for September, which will be released on Friday.

Non-farm payrolls likely increased by 60,000 last month, according to a Reuters survey, after being flat in August. The gain in non-farm employment will mostly reflect the return of 45,000 striking Verizon Communications workers to payrolls.

The jobless rate is seen steady at 9.1 per cent.

US stocks rose for a third day, while prices for government debt fell. The dollar was marginally weaker against a basket of currencies.