Level of first-time claims drops to lowest in nearly three years By Jeffry Bartash, MarketWatch WASHINGTON (MarketWatch) — New applications for state jobless benefits fell to their lowest level in nearly three years last week, another sign that the U.S. labor market continues to gradually improve, government data showed Thursday. The number of people filing initial requests for unemployment compensation fell by a seasonally adjusted 20,000 in the week ended Feb. 26, down to 368,000, the Labor Department reported. The last time claims were that low was in May 2008. Economists polled by MarketWatch had expected first-time claims to rise to a seasonally adjusted 398,000 from last week’s revised level of 388,000. Over the past four weeks, claims have averaged 388,500, marking the lowest one-month average since July 2008, according to the data. The four-week average is considered more accurate a gauge of employment trends because it lessens week-to-week volatility in the data. The decline in claims, which have fallen 27% since last August, appears to be consistent with a modest pace of hiring and fewer layoffs. When the U.S. economy creates lots of new jobs, applications for jobless benefits usually — but not always — fall well below 400,000 for a prolonged period. Yet so far, the downward trend in claims hasn’t been matched by a corresponding increase in the government’s monthly employment data. The economy gained an average of 83,000 jobs a month over the past three months, well below the rate needed to drive down the nation’s 9% unemployment rate. Companies have to hire about 125,000 new workers a month just to keep up with the natural growth of the labor force. Job growth would have to be twice as large as that over many months to pull down the jobless rate closer to pre-recession levels of 5%.

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