MW: Jobless claims dip but remain above 400,000 level
Claims fall 13,000 after 31,000 jump in prior week
By Greg Robb, MarketWatch
WASHINGTON (MarketWatch) — Jobless claims fell in the latest week but remained above the key 400,000 threshold for the second straight week suggesting that improvement in the labor market has stalled.
The number of people filing for state unemployment benefits for the first time fell 13,000 to a seasonally adjusted 403,000 last week, the Labor Department reported Thursday.
This is the first time that claims have been above 400,000 for two weeks since late January and the decline only partially reverses the big jump in claims in the prior week.
Claims in the previous week were revised to an increase of 31,000 to 416,000, compared with the initial estimate of an increase of 27,000 to 412,000.
When the U.S. economy creates lots of new jobs, new applications for unemployment benefits usually drop well below 400,000 for a prolonged period.
Initial claims are well below the 448,000 per week average in the second half of 2010 but have plateaued in recent weeks.
Jim O’Sullivan, economist at MF Global, said this may be due to disruption to auto output from the earthquake in Japan.
Economists had been looking for first-time claims fall below 400,000.
The average of new claims over the past four weeks, meanwhile, rose by 2,250 to 399,000. This is the highest level since the week ended Feb. 19. The four-week average smooths out the data to minimize the impact of one-time changes due to weather, strikes or holidays.
Meanwhile, the number of people collecting regular state benefits fell by 7,000 in the week ended April 9 to a seasonally adjusted 3.70 million, the lowest number since September 2008. The insured unemployment rate held steady at 2.9% in the latest week.
The four-week average of continuing claims dropped 17,500 to stand at 3.72 million, the lowest level since October 2008.
Initial claims represent job destruction, while the level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs.
Before the recession, the U.S. employed 146.6 million people. As of March, there were 139.9 million workers in the economy. The jobless rate stood at 8.8% in March — almost double the rate before the 2007-2009 recession — despite a big drop over the past six months.
All told, 8.3 million people received some kind of state or federal benefit in the week of April 2, down from 8.5 million in the prior week. The data are unadjusted.
