By Rex Nutting, MarketWatch
WASHINGTON (MarketWatch) - The number of people filing an initial claim for unemployment benefits declined by 24,000 last week to a seasonally adjusted 456,000, the first drop in three weeks, the Labor Department reported Thursday.
Although layoffs are down significantly from the peak a year ago, initial jobless claims have remained stubbornly high, a sign that labor markets are very weak. Initial claims are essentially unchanged from the first of the year, but are down 27% from a year ago.
The four-week average of new claims - considered a better gauge of underlying trends than the volatile weekly number - rose by 2,750 to 460,250, the highest in a month.
Meanwhile, the number of people collecting regular state benefits dropped by 40,000 to a seasonally adjusted 4.65 million in the week of April 10. The four-week average of continuing state claims fell by 5,500 to 4.64 million, the lowest since January 2009.
Continuing state claims are down 21% from a year ago.
However, more than 5 million others are collecting extended federal benefits, which are available after state benefits expire, generally after 26 weeks.
In the week of April 3, 5.56 million people were collecting extended federal benefits, down 479,000 from the previous week. A budget dispute in the Senate, which has now been resolved, meant that no one could move into a new tier of benefits.
All told, in the week of April 3, 10.54 million people were collecting some type of unemployment benefits, down 538,000 from the previous week's 11.08 million.
The economy has begun to add some jobs, but not enough to bring down the unemployment rate, which was 9.7% in March for the third straight month. In March, nonfarm payrolls rose by 162,000, the third increase in the past five months. Private-sector payrolls rose by 123,000.
Because of population growth, the economy needs to create about 110,000 jobs each month just to stay even, and it would have to create much more than that to chip way at the 15 million people who are unemployed.
Most analysts in and out of government predict only a slow decline in the unemployment rate this year and next.
