Dropping Jobless Claims Hint At Possibly Recovering Labor Market

WASHINGTON - The number of Americans filing new claims for unemployment benefits fell more than expected last week, offering hope the labor market recovery remains on track.

Initial claims for state unemployment benefits fell 29,000 to a seasonally adjusted 409,000, the Labor Department said on Thursday, continuing to unwind the prior weeks' spike.

Economists polled by Reuters had forecast claims dropping to 420,000. The prior week's figure was revised up to 438,000 from the previously reported 434,000.

"Clearly what it shows is an ongoing healing in the labor market. The recent data have been skewed by special factors like the Easter holiday and supply chain issues coming out of Japan," said Neil Dutta, a U.S. economist at Bank of America Merrill Lynch in New York.

"Some of the increase in jobless claims have been organic due to the slowing in the economy."

U.S. stock index futures extended gains on the report, while prices for government debt widened losses. The dollar rose against the yen.

The four-week moving average of unemployment claims, a better measure of underlying trends, rose 1,250 to 439,000 - the highest level since mid-November.

The data covers the survey period for the government's closely watched employment report for May, which will be released early next month.

The recent jump in claims, blamed on auto layoffs because of supply chain disruptions from March's Japanese earthquake and problems with adjusting data for seasonal variations, had raised fears of a pull back in the pace of job creation.

Employers added 244,000 jobs in April, the most in 11 months. However, the unemployment rate rose to 9 percent from 8.8 percent in March.

Despite the fall, claims held above the 400,000 mark for a sixth straight week, indicating payroll growth will only be gradual. The four-week average has now been above that level, which is normally associated with stable job growth, for four weeks in a row.

A Labor Department official said only one state or territory, the Virgin Islands, had been estimated, indicating the report was largely clear of distortions.

The number of people still receiving benefits under regular state programs after an initial week of aid fell 81,000 to 3.71 million in the week ended May 7.

Economists had expected so-called continuing claims to fall to 3.72 million from a previously reported 3.76 million.

The number of people on emergency unemployment benefits increased 53,398 to 3.47 million in the week ended April 30, the latest week for which data is available. A total of 7.94 million people were claiming unemployment benefits during that period under all programs.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

Copyright 2011 Thomson Reuters. Click for Restrictions.

Comments

[doubtingdavid]

04:41 PM on 05/25/2011

They keep trying to sell the lie that the economy and job situation is getting better, even though anyone who is unemployed or still lucky enough to be collecting a paycheck knows better. It's all a desperate attempt to paint a rosy picture (lie) to get Obama re-elected

[Michael Thornton]

03:31 PM on 05/20/2011

I hate to say it, but just because claim numbers go down doesn't mean that more jobs are being created. In fact, the BLS reported that the job creation figures were more people hired in March 2010 than in March 2011. The number of job openings from the BLS: The job openings level has trended up since the end of the recession in June 2009 (as designated by the National
Bureau of Economic Research) but remains well below the 4.4 million openings when the recession began in December 2007.

Over the past three years the US has 1.3 million fewer job openings and the demand for jobs in the workforce increases as the population increases. It takes 125,000 new jobs each month to simply keep up with new entrants into the workforce.

At this stage of a recovery, having more than 400,000 jobless claims each week is a sign of a very weak job market. Don't get out the party hats just yet.....

[mashtoe]

12:29 AM on 05/21/2011

Exactly. The elite are in a hurry to paint a rosy picture. They want to defend H-1b work visas, amnesty for illegals, and free trade because they drive down wages and increase profits for the few at the top.
If your goal is to make the rich richer then keep all the old wage suppression regulations in place. Obama supports wage suppression. When Obama claims he wants to help ensure US business is competitive he is talking about ensuring wages are suppressed.

[fortressfountain]

12:37 PM on 05/20/2011

The labor costs were too high? Most people would pay more if the goods were made here.
Labor costs are too high because of excessive taxation and the devaluation of the dollar.
Why does not anyone say ceo salaries and bonuses are too high for running failed companies.

[mashtoe]

01:11 AM on 05/21/2011

When someone says labor costs are too high they are saying they want federal government interference. Work visas is a prime example. They want want direct federal regulation of workers wages and then bailouts for billionaires.

[fortressfountain]

12:35 PM on 05/20/2011

The jobs created are 10 hour a week or lawn mowing-no unemployment taken out.

[Reno Fickler]

09:36 PM on 05/19/2011

Trade agreements with foreign entities destroyed an enormous number of USAs manufacturing jobs due to the cost of labor. The trickle down of that mistake will last for years. Add to that the fact that most of Americans purchases today are foreign manufactured. Buying 'foreign' perpetuates and increases unemployment here.
The rate of UE will hover at 10% for years as the number entering the program will begin to equal the number running out of benefits. The total without jobs will increase every year.
To survive we will have to become more "socialist" than we are now.

[mashtoe]

01:13 AM on 05/21/2011

Yup. Both parties are profiting from the current system. H-1b work visas drive down wages and enrich executives who then pay politicians more money.

[doubtingdavid]

04:45 PM on 05/25/2011

Yup, it was called NAFTA, A brilliant Clinton idea.

[spinns17]

05:17 PM on 05/19/2011

FYI.....http://www.inthesetimes.com/working/entry/7316/while_negiotations_bug_down_at_honeywell_locked_out_workers_travel_far/

[pugnacious progressive]

04:36 PM on 05/19/2011

Economists change their predictions on a weekly basis (making such predictions interesting but useless), democrats don't have the collective backbone to suggest a new WPA (despite our god-awful crumbling infrastructure), and conservatives insult the unemployed as lazy thieves (even though 1 million of these "lazy" people recently tried to get a jobs at McD's--and McD's promptly turned away 93% of them).

And this has been going on for nearly three years now. A constant hum of do-nothing policies and/or insults from our elected "leaders."

Meanwhile, almost 30 million people wish they had a full-time job but can't find one (http://www.njfac.org/).

What's all this say about America?

[coracii]

02:31 PM on 05/20/2011

"What's all this say about America?"

My answer... that Reagonomics destroyed the country?

[mashtoe]

01:16 AM on 05/21/2011

Democrats do support a WPA program but only for low wage foreigners seeking jobs in America. H-1b is a perfect example.

Listen to Obama's last speech. He was talking about work visas to allow Mideast workers into the US. Most people probably thought he meant he wanted increased jobs in the mideast. No, he wants to import more workers into the US to drive down wages.

[kenhamlett]

04:31 PM on 05/19/2011

It is welcome news any time the number of new claims falls. But, we have been down this road a number of times in recent months, with the same theory that we "might be turning the corner" tossed into the mix. The fact is that the number of new claims has been unexpectedly high for the past month, and today's number is simply getting us back down to where we were a couple of months ago. Causing continuing concern is that the number is still above the threshold of 400,000 that indicates a troubled economy. With the continuing high cost of fuel, there is no certainty at all that this is the beginning of a turnaround in our jobs picture. Instead of wishing for success, we need to see both our political parties working to provide job creation programs and taking steps to lower the costs of those fuels which are threatening our recovery. You do not get results with the economy by simply hoping for them.

[Peppers Dad]

03:49 PM on 05/19/2011

This is such a blatant tease: UNEMPLOYMENT - News so big it needs its own section or whatever. It seems like it's been here for, what, two years? A section for advocacy or a section to say HP is the only "paper" in America to devote space to this crisis?

I'm so attuned and aware of my situation (99er) that when the banner at the very top reads (leads with) Unemployment, I click on it so fast I dislocate my wrist. And it's nothing. Zip. "Pelosi and Reid punt on 99ers (January, 2010) saying Repelicans TOO TOUGH to fight in Congress."
"Stabenow leads last second charge for 99ers to no avail." "Dems push for extensions de-railed as Congress evacuates Washington for break." "Repelicans deny long-term unemployed issues have not been addressed."

Even a starving lion will eventually pass a carcass he's picked apart over time.

[blueken]

03:35 PM on 05/19/2011

Figures don't lie, but figurers do. Tell me, do those numbers include the millions of high school and college grads who just entered the market? Didn't think so.

[Peppers Dad]

03:52 PM on 05/19/2011

You're correct except that they are not unemployment statistics officially until they file having lost a job. It's a frightening number and my youngest is so blessed (as am I) to be employed by a solid company after graduating last May. At graduation, I sat through thousands of kids' names thinking "I hope they've got something SOLID lined up."

[blueken]

04:06 PM on 05/19/2011

Luck comes to those that prepare. I went to night school for 5 years to get into the IT profession. During that time a lot of my friends had high paying construction jobs. When I got my degree I took a third shift operators job, makeing much less than my last job, just to get my foot in the door. It's now 30 years later, a lot of my friends are now out of work, or only working part time due to lack of work, or a worn out body. I have a pretty good job and make a decent pay with benifits. Luck comes to those that prepare.

[the griff]

02:07 PM on 05/19/2011

No wonder they have dropped. Most have given up. There are no jobs!

[JoblessInJersey]

01:52 PM on 05/19/2011

8 million getting unemployment; many millions not eligible or used up their maximum. Current unemployment is somewhere about 14 million, I think.

244,000 jobs added in April, most in 11 months: yet new entrants to the job market are around 125,000-150,000 per month, many of them new immigrants with work visas.

You all do the math.

Tell me why this isn't treated like an emergency.

Tell me what we're still admitting immigrants we don't need, like the parents and brothers and sisters of prior immigrants. We need to take legal immigration off autopilot and only accept people who have job skills that we need. Sorry but this extended family reunification stuff has to stop.

We don't have enough jobs for ourselves.

[Bagger]

03:03 PM on 05/19/2011

The bleeding has stopped. It takes a while to turn a ship going the wrong way.

[JoblessInJersey]

03:39 PM on 05/19/2011

True. But why does Obama and everybody in Congress act like this unemployment emergency is not an emergency?

He's never said that full employment will take another five years or more to return.

He's never asked that legal immigration be curtailed.

What he can do -- be straight with the American people -- he has not done.

What he should do -- ask Congress for more help for the unemployed -- he has not done.
We know that Congress is cheap these days, but if the public knew the facts and pressured Congress to act, they might. Up until know there's been no test because Obama and the Democrats have stayed silent about the true, disastrous nature of the US unemployment problem.

Obama does not control the economy. But he has not shown leadership, honesty or sufficient compassion on this issue for more than a year. He was great in 2009, but those days are gone.

[JoblessInJersey]

01:45 PM on 05/19/2011

The stagnation continues. Up a little, down a little, for over a year. Yet each week financial experts say something about how the new figure indicates a trend.

The only trend I've seen is that unemployed folks out of work since 2007-2009 will stay that way for a long time.

[Steve Rockett]

01:11 PM on 05/19/2011

The democratic recovery plan is working. Thank you Mr. President.

[spinotter11]

01:36 PM on 05/19/2011

I'm glad we're in resonance on the debt of gratitude we owe to our president.

[MrStat1]

03:58 PM on 05/19/2011

For what?

[doubtingdavid]

04:51 PM on 05/25/2011

Yup, the plan where I got "laid off" with a bunch of other experienced workers and get replaced a few weeks later by younger unqualified immigrants that the lucky few who survived the first rounnd of layoffs had to train until they too got let go. Thanks Mr. President.

[MaxBob]

12:44 PM on 05/19/2011

400K + every week means we are still losing jobs at a steady pace. 300K - will mean we actually add jobs.