U.S. initial jobless claims decline

The number of Americans filing initial claims for jobless benefits dropped by 7,000 last week.

The U.S. Labour Department said Thursday the number of newly laid-off workers requesting benefits in the week ended May 1 decreased by 7,000 to a seasonally adjusted 444,000.

The four-week moving average was 458,500, a decrease of 4,750 from the previous week's revised average of 463,250. Economists pay closer attention to the four-week average because it smooths out fluctuations.

Jobless claims tend to indicate the pace of layoffs, and watchers say the level of new claims must get below 425,000 and stay there for several weeks to signal that the economy is actually adding jobs.

The decrease was welcome news, but less than the five-figure decline that economists were expecting. A drop to the 440,000 level or lower would have been the lowest level since August 2008, before Lehman Brothers collapsed, BMO economist Michael Gregory noted.

Total claims down

The total number of people claiming unemployment benefits in state programs totalled 4,635,631, a decrease of 152,657 from the preceding week. In the same week a year ago, the total number was 6,280,863.

The figure does not include millions of people who have used up the 26 weeks of benefits they are entitled to under normal state programs and who are now receiving extended benefits for up to 73 additional weeks. Those benefits are paid for by the federal government as part of its emergency stimulus measures.

Thirty-eight states, the District of Columbia and Puerto Rico are now processing extended benefit claims that Congress approved mutiple times in 2009.