February 16, 2010

U.S. jobless claims decline at start of 2010

WASHINGTON, D.C.

The number of newly laid-off American workers seeking unemployment benefits fell more than expected to the lowest total in a month, a hopeful sign the job market may be improving.

The U.S. Labour Department said that first-time claims for unemployment insurance dropped by 43,000 to a seasonally adjusted 440,000. Wall Street economists expected a smaller decline of 15,000, according to a survey by Thomson Reuters.

The jobless claims report was the first of the year that wasn’t affected by a holiday backlog. The easing of the backlog had elevated the numbers for the previous three weeks.

Next week’s figures, though, will likely be affected by the closing of businesses and government offices this week due to the snowstorms in the Mid-Atlantic region.

This week is also the period when the government gathers information for the monthly report on the unemployment rate and employer payrolls. The severe weather may also distort those figures, economists said. That could make it hard to get an accurate picture of the job market for several weeks.

The four-week average of jobless claims fell by 1,000 to 468,500, the first drop after three weeks of increases. Many economists say the four-week average would need to fall consistently below 425,000 to signal that the economy will start generating net job gains.

First-time claims are now close to the low levels they reached in late December, when they dropped to their lowest point in nearly 18 months.

Still, jobs remain scarce. The Labor Department said that the unemployment rate fell to 9.7 per cent from 10 per cent. But most analysts expect it to remain near 10 per cent through the end of the year.

The number of people claiming benefits for more than a week, meanwhile, fell by nearly 80,000 to 4.5 million. That was a steeper decline than expected.

But the so-called continuing claims do not include millions of people who have used up the regular 26 weeks of benefits typically provided by states, and are receiving extended benefits for up to 73 additional weeks, paid for by the federal government.

Nearly 5.7 million people were receiving extended benefits in the week ended Jan. 23, the latest data available, down from nearly 5.9 million the previous week. The extended benefit data isn’t seasonally adjusted and is volatile from week to week.

Among the states, Pennsylvania reported the largest increase, of nearly 10,5000, which it attributed to layoffs in the construction and service industries. Illinois, North Carolina, Georgia and Missouri had the next largest increases.

Associated Press

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