The fewest Americans in more than five years applied for new unemployment benefits last week. Initial jobless claims sank by 18,000 to a seasonally adjusted 324,000, the lowest level since January 2008. Economists surveyed had expected claims to rise to 345,000.
By Jeffry Bartash
May 2, 2013, 10:52 a.m. EDT
The fewest Americans in more than five years applied for new unemployment benefits last week, a surprising decline that may reflect seasonal quirks more than a sudden improvement in the jobs market.
Initial jobless claims — a rough gauge of layoffs — sank by 18,000 to a seasonally adjusted 324,000 in the week ended April 27, the Labor Department said Thursday. That’s the lowest level since January 2008.
Economists surveyed by MarketWatch had expected claims to rise to 345,000 from a revised 342,000 in the prior week.
In recent action, U.S. stocks moved higher, aided by the drop in claims and the an interest-rate cut by the European Central Bank. A separate report on trade also showed a large drop in the U.S. trade deficit in March.
Claims often gyrate sharply in the month after Easter because of the Good Friday holiday and spring break, making it harder for Labor officials to adjust claims for seasonal oddities. Yet the effects usually fade by early May.
Labor officials said there were no usual factors in the claims data. The decline in claims might suggest some improvement in the labor market, mainly fewer layoffs. The report is less reliable as an indicator of hiring, though, and other employment indicators have signaled companies are creating fewer jobs compared to just a few months ago.
“The decline in claims suggests that there is no uptrend in hiring but after years of layoffs there are also few workers left to be let go,” said Steven Ricchiuto, chief economist at Mizuho Securities.
The latest report from large payroll processor Automatic Data Processing, for instance, appeared to underscore the sluggish pace of job growth. ADP on Wednesday said private companies added just 119,000 jobs in April, down from 131,000 in March and marking the weakest gain since September.
The government’s official employment report, released Friday, is also expected to show job creation has faltered. Economists polled by MarketWatch forecast a net increase of 135,000 jobs in April.
While that would surpass the initially reported 88,000 new jobs created in March, the pace of hiring would fall well below the 220,000 average from November through February. Softer employment growth is one of many signals pointing to a spring-summer economic swoon for the third straight year.
Meanwhile, the four-week average of new claims, which smooths out weekly volatility, fell by 16,000 to 342,250. That’s the smallest amount in six weeks.
The number of people already receiving benefits, known as continuing claims, rose by 12,000 to a seasonally adjusted 3.02 million in the week ended April 20. Most states typically offer 26 weeks of unemployment pay.
Also Thursday, the Labor Department said first-quarter productivity rose 0.7%, though U.S. workers and businesses are not nearly as efficient as is normally the case this far into an economic recovery.
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