Nigel Gault, chief U.S. economist at Global Insight, said the report will be overshadowed by the nonfarm payrolls report, which is being released a day early due to the Fourth of July holiday.

"Jobless claims continue to be trending up but haven't quite hit 400k yet, the clear recessionary level," he added. His forecast for initial claims is for a fourth month above the 380k level.

Forecasts for initial claims from the 37 economists surveyed range from 370k to 395k, with the consensus looking for 385k claims. That figure is above the four-week moving average at 378k.

Continuing claims have been on a steady rise in recent months, hitting the eighth week in a row above the three million mark in the last report at 3.139 million. Economists expect that figure to fall back to 3.125 million in the week ending June 21, a number still well above the four-week moving average of 3.103 million.

Economists say the rise in continuing claims indicates that laid-off employees are having difficulty finding new jobs.

Following last week's report, Ian Shepherdson, chief U.S. economist at High Frequency Economics, said, "Three straight weeks of claims in the mid-380s is not good news; this is recession territory." He noted that claims will move higher over the next few weeks as the automakers start their annual retooling shutdowns and that a "big spike" is entirely possible due to the desperate state of the auto market.

By Patrick McGee, This email address is being protected from spam bots, you need Javascript enabled to view it , edited by Cristina Markham, This email address is being protected from spam bots, you need Javascript enabled to view it

CEP Newswires - CEP News © 2008. All Rights Reserved. www.economicnews.ca

The Copying, Broadcast, Republication or Redistribution of CEP News Content is Expressly Prohibited Without the Prior Written Consent of CEP News.

A copy of CEP News disclaimer can be found at http://www.economicnews.ca/cepnews/wire/disclaimer.