By Shobhana Chandra Oct. 22 (Bloomberg) -- More Americans than forecast filed claims for unemployment benefits last week, a reminder that the labor market will be slow to recover. Initial jobless applications rose by 11,000 to 531,000 in the week ended Oct. 17, from a revised 520,000 the prior week that were the fewest in nine months, the Labor Department said today in Washington. The number of people collecting benefits fell, while those receiving extended benefits increased. Economists project the unemployment rate will reach 10 percent by the first quarter of 2010, underscoring the risk to consumer spending, the biggest part of the economy. Companies cutting costs remain reluctant to hire, even as they’ve eased dismissals from levels seen earlier this year. “Until demand turns around, businesses have to continue to cut costs,” said Joshua Shapiro, chief U.S. economist at Maria Fiorini Ramirez Inc., a New York forecasting firm. “We remain pessimistic on consumer spending.” Jobless claims were projected to increase to 515,000 from 514,000 initially reported for the prior week, according to the median forecast of 43 economists in a Bloomberg News survey. Estimates ranged from 500,000 to 540,000. Stock-index futures were little changed following the report. The Standard & Poor’s 500 Index contract was at 1,078.2 at 8:39 a.m. in New York compared with 1,078.1 at yesterday’s close. Treasury securities were down, sending the yield on the 10-year note up to 3.43 percent from 3.39 percent late yesterday. Payroll Survey Today’s numbers represent claims for the week the Labor Department surveys companies to calculate this month’s payroll figures. The report is due Nov. 6. The four-week moving average of initial claims, a less volatile measure, fell to 532,250 last week from 533,000. Continuing claims decreased by 98,000 in the week ended Oct. 10 to 5.92 million, in part reflecting those that have used all their benefits without finding another job. Those figures don’t include Americans receiving extended benefits under federal and state programs. The number of people collecting extended payments climbed to 3.86 million in the week ended Oct. 3 from 3.83 million a week earlier, today’s report showed. The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 4.5 percent in the week ended Oct. 10, from 4.6 percent the prior week. 49 States Forty-nine states and territories reported an increase in claims, while 4 reported a decrease. Florida led states showing a gain with a jump of 9,976 that reflecting more firings in construction, services and manufacturing. These data are reported with a one-week lag. Initial jobless claims reflect weekly firings and tend to rise as job growth -- measured by the monthly non-farm payrolls report -- slows. Legislation to extend unemployment benefits is stalled in the Senate amid a partisan dispute over issues such as how to finance the plan. Republicans are blocking the measure that would extend payments by as much as 20 weeks because they want votes on several amendments, including on how to pay for the $2.4 billion measure so it doesn’t add to the federal budget deficit. Democrats plan to finance the aid by extending an employer payroll surtax due to expire at the end of this year. Nevada, Florida Unemployment rose in 23 U.S. states in September and hit records in Nevada, Rhode Island and Florida, the Labor Department reported yesterday. “Labor market conditions were generally reported as weak or mixed across Districts, but a few encouraging signs were noted,” the Federal Reserve said in its Beige Book business survey released yesterday. The central bank cited “stabilization or modest improvements” in many areas of the economy. The economy has lost 7.2 million jobs since the recession began in December 2007. Sun Microsystems Inc., which is waiting for European regulators to approve its acquisition by Oracle Corp., is among companies still reducing staff. Santa Clara, California-based Sun plans to cut as many as 3,000 jobs around the world, or about 10 percent of its workforce, to pare expenses over the next 12 months. Some firms are upbeat about the economic recovery. Google Inc., the world’s most popular Internet search engine, plans to resume hiring and acquisitions after third-quarter sales beat analysts’ estimates. Mountain View, California-based Google cut jobs and shut underperforming units this year. “If you have all this behind you, the only outcome you should have as management is: ‘OK, let’s build now,” Chief Financial Officer Patrick Pichette said in an Oct. 16 interview.

Source