New jobless claims drop more than expectedPosted: Updated:
WASHINGTON -- The number of newly-laid off workers seeking unemployment insurance fell last week, the government said Thursday, fresh evidence that layoffs are easing.
The Labor Department said that initial claims for jobless benefits dropped to a seasonally adjusted 550,000 for the week ending Aug. 1, down from an upwardly revised figure of 588,000 in the previous week.
That's much lower than analysts' estimates of 580,000, according to a survey by Thomson Reuters. The four-week average of claims, which smooths out fluctuations, dropped to 555,250, its lowest level since late January.
The tally of people continuing to claim benefits rose, however, by 69,000 to 6.3 million, the department said, after dropping for three straight weeks. The continuing claims data lags initial claims by a week.
Many economists expect initial claims to continue to decline this year.
"Claims should fall over the next few months, as the economy appears more or less to have stabilized," Ian Shepherdson, chief U.S. economist at High Frequency Economics, said in a note to clients before the department's report.
When emergency extensions of unemployment are included, the total rolls climbed to a record 9.35 million for the week ending July 18, the most recent data available. Congress has added up to 53 extra weeks of benefits on top of the 26 typically provided by the states.
The increase in the number of people continuing to claim benefits is a sign that jobs remain scarce and the unemployed are having difficulty finding new work.
Despite the improvement, weekly jobless claims remain far above the 300,000 to 350,000 that analysts say is consistent with a healthy economy. New claims last fell below 300,000 in early 2007.
The recession, which began in December 2007 and is the longest since World War II, has eliminated a net total of 6.5 million jobs. The unemployment rate is expected to rise to 9.6 percent when the July figure is reported Friday. The jobless rate of 9.5 percent in June marked a 26-year high.
More job cuts were announced this week. The publisher of the Milwaukee Journal Sentinel said it would slash 92 jobs as the current advertising slump continues to ravage the newspaper business. Elsewhere, about 6,000 General Motors Co. blue-collar workers have taken the latest round of early retirement and buyout offers. But GM wants to cut about 13,500 workers, setting the stage for more layoffs.
Among the states, Ohio had the biggest increase in claims, with 891, followed by Oklahoma, Mississippi, Louisiana and Alaska. State data lags behind initial claims data by one week.
North Carolina had the largest drop in claims, with 9,809, which it said was due to fewer layoffs in the textile, furniture, rubber and plastics, and industrial machinery industries. Michigan, Florida, Georgia and Alabama had the next largest declines.
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