U.S. jobless claims hit 1-year low

The number of Americans filing for jobless benefits fell by the largest amount in more than a year last week.

The number of people filing initial claims for benefits also dropped, the U.S. Department of Labour said Thursday, to 456,000 during the week ended June 5. That's 3,000 below the previous week's level.

The total number of people receiving jobless benefits fell by 255,000 to a seasonally adjusted 4.5 million, the lowest total since December 2008.

Jobless claims tend to indicate the pace of layoffs, so the news is encouraging. But some of those recipients may have exhausted the 26 weeks of benefits customarily provided by most states. A Labour Department analyst said state agencies didn't provide any explanation for the drop.

The initial jobless claims number has hovered around 450,000 per week for most of the year, after dropping steadily through late 2009. That has raised concerns among economists that hiring remains weak and could slow the recovery.

Extended benefits

Federal programs normally provide for up to 26 weeks of benefits. But 38 states, the District of Columbia and Puerto Rico are now processing extended benefit claims that Congress approved multiple times in 2009 in the face of a cratering economy.

All told, nearly 5.4 million Americans are receiving those extended benefits. About 9.8 million people drew unemployment in the week ending May 22, the latest data available shows.

That total is likely to drop in the coming weeks. The extended benefit program will expire in early June, and Congress is debating whether to continue it through the end of November.

About 325,000 people will lose unemployment aid by the end of this week due to the cutoff, the department estimates. That total could grow to 1.25 million by the end of the month if the extension isn't passed.

Last week, the Labour Department said the economy generated only 41,000 private-sector jobs in May, down from 218,000 in April.

Temporary census hiring added another 411,000 jobs, and the unemployment rate fell to 9.7 per cent from 9.9 per cent.