U.S. jobless claims dip

The number of Americans filing new claims for jobless benefits fell for the third time in four weeks last week, dropping by 11,000 to a seasonally adjusted 457,000.

Claims have fluctuated this month due to temporary seasonal factors, the Labour Department said Thursday. General Motors and other manufacturers skipped their traditional summer shutdowns, which led to fewer layoffs and unemployment claims.

The four-week average of claims, which smooths fluctuations, dropped to 452,500, the lowest level since May. Economists say jobless claims need to fall to at least 425,000 to signal sustained job growth.

"I don't think there is anyone who is expecting a quick decline in the jobless rate anytime soon," BMO analyst Jennifer Lee said of the data. "The level is still too high for anyone's liking."

Last week, Congress approved legislation to restore unemployment benefits to people who have been out of work for six months or more.

Partisan bickering had caused a seven-week interruption of benefits for more than two million people.

Retroactive payments went out this week in some states. The U.S. government has struggled to stimulate a moribund economy while keeping a ballooning federal deficit under control.

Under normal circumstances, the first 26 weeks of jobless benefits are paid for by the states. But the new legislation renews a federally financed program providing up to 73 additional weeks of benefits in states with high unemployment rates.

About half of those eligible have had their benefits cut off since funding expired June 2.