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Jobless Claims Fall to Two-Month Low, Down 33,000

Reuters
Thursday, 24 Apr 2008 | 10:01 AM ET

Initial U.S. jobless claims unexpectedly fell last week while durable goods orders last month showed some signs of resilience, according to government data Thursday that eased concern about the pace of the country's economic slowdown.

CNBC.com

The dollar rose, while U.S. equity futures cut their losses and Treasury bonds slipped in price after the data, which showed first-time jobless claims falling sharply and durable goods orders down mostly due to a big drop in orders for transportation goods.

"They sure don't look like recession numbers to me," said Michael Darda, chief economist at MKM Partners LLC in Greenwich, Connecticut, referring to the jobs data.

"I'm keeping my eye on the 4-week moving average, but it would seem to me this is starting to ebb a little, so that's good," he said.

The number of U.S. workers filing initial claims for unemployment benefits fell by 33,000 last week, the Labor Department said, though the number of workers remaining on jobless benefits continued at a high level.

Initial claims for jobless benefits decreased to a seasonally adjusted 342,000 in the week ended April 19, from a revised 375,000 in the prior week.

Analysts polled by Reuters had expected initial claims to edge up to 375,000 from an initially reported 372,000 in the April 12 week.

The four-week moving average of new claims, a more reliable guide to underlying labor trends because it irons out weekly fluctuations, fell last week to 369,500 from 376,750.

The number of workers remaining on jobless benefits eased to 2.934 million for the week ended April 12, the most recent week these figures were available, from 2.999 million the prior week. But it was the fourth straight week in which continuing claims remained above 2.9 million.

Analysts were expecting continuing claims to hit 3 million during the April 12 week.

Jobless Claims & Durable Goods
A look at the numbers, with Jim Iuorio, TJM Institutional Services director; Thomas Lee, JPMorgan; CNBC's Rick Santelli & Steve Liesman

"The 4-week moving average is still consistent with a slowdown, but the idea this is a second Great Depression or Japan circa-1995 is just utter hysteria and the numbers I think prove that," said Darda.

The Commerce Department data separately showed that new orders for long-lasting U.S. made goods unexpectedly fell 0.3 percent in March after transportation ordered slumped, and a key gauge of corporate investment appetite held steady.

New orders excluding transportation rose 1.5 percent, while transportation equipment fell 4.6 percent, including a matching drop in motor vehicles and parts which was the steepest drop since last August.

Nondefense capital goods orders excluding aircraft, a closely watched proxy for business spending, was unchanged as forecast and the previous month was revised up to show a 2.0 percent decline, from a 2.4 percent drop reported before.

"There is continued reluctance to make large capital investments," said Richard DeKaser, chief economist at National City, in Cleveland.

Analysts polled by Reuters had expected overall orders to be unchanged in March from a revised 0.9 percent fall the month before, previously estimated as a 1.1 percent drop. They forecast orders ex-transportation to rise 0.4 percent.

"The ex-transportation durables were stronger than expected, That should be negative for the bond market," said Steve Brown, chief economist with Raymond James & Associates in St. Petersburg, Florida.

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