<font color=blue>Jobless Claims Fall in Latest Week</font>
Thursday May 8, 9:13 am ET
By Nancy Waitz
biz.yahoo.com
WASHINGTON (Reuters) - Total initial U.S. unemployment claims fell last week, but a more accurate barometer of labor trends rose to its highest level in more than a year, the government said on Thursday in a report showing an economy having trouble supporting new jobs.
First-time claims for state jobless benefits fell 28,000 to 425,000 in the week ended May 3 compared with an upwardly revised 453,000 in the prior week, the Labor Department said.
New claims dropped below Wall Street economists' average forecast for 438,000. The department originally measured new claims at 448,000 in the April 26 week.
The four-week moving average, a more accurate indicator of the labor market's health because it smooths out any volatility in the weekly data, rose 3,250 to 446,000 in the May 3 week and to its highest since 449,000 in the April 20, 2002 week.
The Treasury bond firmed up on the news of a drop in jobless claims, while the dollar remained steady.
'It's encouraging where we've had two weeks in a row where the level has dropped a bit,' said Patrick Fearon, an economist with A.G. Edwards and Sons.
'However, claims are still elevated, consistent with our view that it could take some time for the employment picture to improve significantly,' Fearon said.
Jobless claims could worsen in weeks ahead as people, who lost jobs due to the devastation from the tornadoes that struck the Midwest this week, are counted and as layoffs at corporations continue to mount.
Carl Tannenbaum, chief economist at La Salle Bank in Chicago said the report showed that 'the job market is struggling. It will be a while before we put people back to work.'
Job cuts announced at U.S. employers jumped in April to their highest monthly tally since November, surging 71 percent, the unemployment research firm Challenger, Gray and Christmas said this week.
New claims extended their string above the critical 400,000 mark to 12 straight weeks, and have been stuck around the 425,000 to 459,000 level for the past four weeks, adding to a picture of a sluggish economy that is having trouble translating gains into job growth.
Most economists view claims over 450,000 as a sign the labor market is deteriorating.
Nearly two million U.S. jobs have vanished since President Bush, who faces a reelection campaign next year, took office.
The Federal Open Market Committee, the policy setting arm of the Federal Reserve, said on Tuesday recent employment readings have proven disappointing, and signaled it was prepared to cut interest rates if needed.
In a sign the unemployed still face the daunting task of finding work, the so-called 'continued claims' -- those who continue to draw benefits -- rose to 3.67 million in the April 26 week, the latest week which data are available and to its highest since October 2002. |
