By Courtney Schlisserman Oct. 29 (Bloomberg) -- The number of Americans collecting unemployment insurance fell more than forecast to the lowest level in seven months, a government report showed. The number of people receiving jobless benefits declined by 148,000 to 5.8 million in the week ended Oct. 17, the lowest since March 21 and biggest weekly drop since July, Labor Department figures showed today in Washington. Initial jobless claims fell by 1,000 to 530,000 in the week ended Oct. 24, from 531,000 the prior week. Companies are cutting few jobs as they see more evidence of a recovery, helped by government stimulus efforts and less weakness in housing and manufacturing. A rebound in hiring may take longer to materialize than other parts of the economy, and economists predict the unemployment rate will rise to 10 percent by early 2010. “The trend in the job numbers seems to be saying that the situation is getting better,” Joel Naroff, chief economist at Naroff Economic Advisors Inc. in Holland, Pennsylvania, said before the report. “It may not be until the spring that we see overall job growth. There is still a lot of work to be done to get us to a self-sustainable expansion.” Economists forecast claims would fall to 525,000, from 531,000 a week earlier, according to the median of 43 projections in a Bloomberg News survey. Estimates ranged from 515,000 to 540,000. Continuing claims were forecast to fall to 5.9 million, from an initially reported level of 5.923 million. Four-Week Average The four-week moving average of initial claims, a less volatile measure, declined to 526,250 last week, the lowest level since January, from 532,250. The continuing claims figures don’t include the number of Americans receiving extended benefits under federal and state programs. The number of people who’ve used up their benefits and are now collecting extended payments dropped by 21,713 to 3.37 million in the week ended Oct. 10 from the prior week, today’s report showed. The unemployment rate among people eligible for benefits, which tends to track the jobless rate, fell to 4.4 percent in the week ended Oct. 17, from 4.5 percent the prior week. Nine states and territories reported an increase in claims, while 44 reported a decrease. 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. The economy has lost 7.2 million jobs since the recession began in December 2007. Extending Benefits Legislation to extend unemployment benefits cleared a procedural hurdle in the Senate as lawmakers voted earlier this week to advance a $2.4 billion measure that would extend benefits by 14 weeks in all states, and by an additional six weeks in states with the highest jobless rates. The legislation has been stalled for weeks by a dispute over which proposed amendments to the plan would get a vote. The Federal Reserve’s most-recent Beige Book regional survey, released Oct. 21, suggested that the economy is gaining momentum and has not yet overcome weaknesses in banking and employment. The U.S. central bank’s Federal Open Market Committee next meets in Washington Nov. 3-4. Chicago Fed President Charles Evans said Oct. 22 that the “biggest challenge for all of us is very high unemployment.” He also said the “job destruction wave” is probably over. Caterpillar Rehires Caterpillar Inc. said Oct. 26 it has started rehiring and expects to return a portion of its laid-off employees to jobs demand increases in the coming months. Even so, while 550 U.S. employees have returned or will return to work before the end of next year, about 2,500 idled U.S. workers are being told they won’t get their jobs back and will be offered a separation package. “It’s important to remember that we are not close to the record-breaking demand we experienced from 2004 through 2008,” Chief Executive Officer Jim Owens said in a statement. Valero Energy Corp., the largest U.S. refiner, said Oct. 27 it may cut workers at its Three Rivers, Texas, refinery to try to cut costs as demand for motor fuel declines. The company is already cutting about 150 workers at its Delaware City, Delaware, and 100 positions at its Paulsboro, New Jersey, plant.

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