By Alister Bull
WASHINGTON (Reuters) - The number of U.S. workers filing new claims for jobless benefits fell 20,000 last week, in line with forecasts, as the impact of hurricanes Gustav and Ike eased, government data on Thursday showed.
Initial claims for state unemployment insurance benefits declined to a seasonally adjusted 478,000 in the week ended Oct 4 from a revised 498,000 the prior week, the Labor Department said. It was the lowest reading since mid-September, but claims remain at levels indicating a weak U.S. employment climate.
"The overall message is that the labor market remains quite weak. We know claims have been boosted by the storms, but the trend remains sharply up and the economy is deteriorating," said Anna Piretti, senior economist at BNP Paribas in New York.
Analysts polled by Reuters had forecast 478,000 new claims versus a previously reported count of 497,000 the week before.
U.S. Treasury debt prices pared losses after the claims data, U.S. equity index futures held their gains and the dollar was steady at lower levels against the euro.
"It is estimated that the effects of Hurricane Gustav in Louisiana and the effects of Hurricane Ike in Texas added approximately 17,000 claims to the total," the Labor Department said in a statement. The previous week it estimated the hurricanes contributed 45,000 claims.
The four-week average of new jobless claims, a better gauge of underlying labor trends because it irons out week-to-week volatility, rose to 482,500 from 474,250 the week before. This was the highest reading since October 2001.
This measure has mounted steadily as the U.S. housing slump has chilled growth and crimped hiring.
"We haven't peaked. It's going to get worse. We're going to lose a lot of jobs in the immediate future," said Nigel Gault, chief U.S. economist at Global Insight in Lexington, Massachusetts.
The number of people remaining on the benefits roll after drawing an initial week of aid rose 56,000 to a higher-than-forecast 3.659 million in the week ended September 27, the most recent week for which data is available.
Analysts estimated so-called continued claims would be 3.60 million. It was the 24th straight week that claims were above 3 million in a sign that the slowing economy is making it harder for U.S. workers to find jobs.
"Payrolls will continue to shrink in the months ahead. We could see number of minus 100,000 or more. We could see the unemployment rate could rise to 7 percent. Earnings prospects will worsen and cut into personal consumption," said Piretti.
(Additional reporting by Richard Leong and Herb Lash in New York, Editing by Andrea Ricci)
