The number of laid-off workers filing claims for unemployment benefits fell last week by the sharpest amount in nearly two months, indicating the labor market remains healthy despite the sluggish economy.
The Labor Department reported Thursday that applications for jobless benefits totaled 321,000 last week, a decline of 20,000 from the previous week.
That was the biggest decline in claims in nine weeks and was more than double what economists had been expecting. Analysts said part of the improvement reflected trouble adjusting the weekly claims data around Easter, which does not fall in the same week every year.
It marked the second straight weekly decline after the claims data had hit a two-month high, another jump that was blamed on seasonal adjustment problems around Easter.
The number of laid-off workers receiving unemployment benefits totaled 2.59 million for the week ending April 14, the highest level since the week of Feb. 17.
The economy has been growing at sub-par rates for the past year, but that weakness has not triggered widespread layoffs, in part because consumer demand has remained strong despite the troubles in housing and parts of manufacturing.
The government is scheduled to give its first estimate of economic growth in the January-March quarter on Friday. Analysts expect that report will show the gross domestic product was growing at an annual rate of just 1.8% in the first quarter, the weakest performance since late 2005, when the country was struggling to cope with the devastation from Hurricane Katrina.
Even in the midst of the yearlong slowdown, the unemployment rate dipped in March to 4.4%, matching a five-year low, as employers boosted hiring by 180,000 workers.
The combination of weak growth and low unemployment has surprised economists, who had expected the jobless rate to be rising at this point, following a script written by the Federal Reserve which pushed interest rates up for two straight years in an effort to slow the economy enough to take pressures off inflation.
The Fed, which has not changed rates since last June, is expected to remain on hold at its next meeting on May 9 as Fed officials continue to signal that their biggest worry remains whether inflation will slow enough.
For the week ending April 14, the seasonally adjusted claims figure dropped by 2,000. A total of 37 states and territories reported decreases in claims while 16 states had increases.
The state with the largest increase was New York, which reported a jump of 16,037 claim filings, which it attributed to higher layoffs in transportation, trade, services and public administration. Other states and territories with big increases were New Jersey, up 2,943, and Puerto Rico, up 1,880.
The state with the biggest decline in claims was California, a drop of 5,309, which was attributed to fewer layoffs in service industries. Other big declines occurred in Pennsylvania, down 5,150, and Illinois, down 3,319.
The state figures, unlike the national data, are not adjusted for seasonal variations.