Jobless Claims Fall in Another Plus for Economy

The number of U.S. workers filing new claims for jobless aid unexpectedly fell by 34,000 last week, Labor Department data showed on Thursday, while a four-week average of new claims declined for a fourth straight week.

AP

Initial claims for state unemployment insurance benefits dropped to a seasonally adjusted 601,000 in the week ended May 2 from a revised 635,000 the prior week, the Labor Department said. It was the lowest reading since late January.

Analysts polled by Reuters had forecast 635,000 new claims versus a previously reported count of 631,000 the week before. A deep U.S. recession has already cost over 5 million jobs since it began in late 2007 and analysts expect the government's employment report for April, due on Friday, will show that a further 595,000 more jobs were lost last month.

But there have been some scattered indications that labor market conditions might be stabilizing, albeit at still very weak levels, alongside other glimpses of hope that the severity of the recession may be easing.

The four-week average of new jobless claims, a better gauge of underlying labor trends because it irons out week-to-week volatility, fell for the fourth week in a row to 623,500 from 638,250 the week before. This was the smallest reading since mid-February.

A Labor Department official said there were no special factors impacting the data. Adjustments to take account of seasonal factors influencing the numbers anticipated a decrease of 16,000 and in fact, claims declined by 46,000.

Economists expect the labor market will remain very depressed even when growth begins to pick up and the weekly report emphasized conditions remain bleak for millions of Americans.

The number of people staying on the benefits roll after drawing an initial week of aid rose 56,000 to 6.351 million in the week ended April 25, the most recent week for which data is available. Analysts estimated so-called continued claims would be 6.36 million.

It was the highest reading on record and pushed the insured unemployment rate to 4.8 percent from 4.7 percent the week before. Continued claims have now notched fresh record high readings for 14 straight weeks.

In other economic news, productivity grew at a slightly higher-than-expected 0.8 percent annual rate in the first quarter, government data showed Thursday, after the number of hours worked fell faster than output as firms cut back sharply on employment to protect profits.

Economists polled by Reuters expected non-farm productivity, which measures the hourly output per worker, to increase at an 0.6 percent pace, compared with a revised 0.6 percent drop the previous three months. This was previously reported as a 0.4 percent decline.

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