Initial claims drop to 422,000 from 428,000 By Jeffry Bartash , MarketWatch WASHINGTON (MarketWatch) — U.S. applications for unemployment benefits fell slightly last week, according to government data released Thursday, but new claims remained at a level typically associated with subpar hiring trends. The Labor Department said 422,000 people nationwide requested jobless benefits in the week ended May 28. The prior week’s number was revised up to 428,000 from an originally reported 424,000. Economists surveyed by MarketWatch had expected initial claims to decline to a seasonally adjusted 418,000 in the week ended May 28. The average of new claims over the past four weeks, considered a more accurate measure of employment trends, fell 14,000 to 425,500, the lowest level in more than a month. The rolling average smooths out week-to-week volatility in the data. Initial claims, which fell to a three-year low of 375,000 in mid-February, have topped the 400,000 mark for eight straight weeks. Weekly applications for benefits usually fall well below 400,000 when the economy is strong and companies are hiring rapidly. The weekly claims report, however, gives just a rough picture of the labor market because it tracks only the number of people who seek government benefits. The data do not take into account how many people got hired in an economy in which millions of Americans switch jobs every month. Still, economists have viewed the recent uptick in claims and a string of other weak economic reports as a warning sign that hiring could throttle back after solid job growth in the first four months of 2011. Most predict that the economy added far fewer jobs in May than it did in April The MarketWatch survey of economists, for example, puts net job growth at 125,000 last month, down from a prior estimate of 170,000. By contrast, the U.S. added 244,000 jobs in April. Read more about lower expectations for payrolls. The government will release the May employment data Friday morning. The number of people who continued to receive unemployment checks, meanwhile, barely changed, totaling a seasonally adjusted 3.71 million in the week ended May 21. Continuing claims are reported with a one-week lag. Some 4.04 million people received extended benefits in the week ended May 14, the latest data available. That was down about 5,000 from the prior week. Many workers who have used up state benefits are also eligible for extended relief from the U.S. government. The total number of people receiving some kind of state or federal benefit, which is reported with a two-week lag, fell by 56,742 to 7.68 million in week of May 14. In a separate report, the Labor Department said first-quarter productivity rose 1.8%, up from an originally reported 1.6%. Real output was revised slightly higher to 3.2%, while the increase in hours worked was unchanged at 1.4%. Unit labor costs rose 0.7%, compared with a prior estimate of a 1.0% increase in the first three months of the year.

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