Unemployment Claims Drop More Than Expected
In this March 9, 2010 photo, Damashata Washington looks for work at Work 2 Future, a federally funded job training center, in San Jose, Calif. (AP Photo/Marcio Jose Sanchez)
March 25, 2010
WASHINGTON (AP) — New claims for unemployment benefits fell more than expected last week. The Labor Department said Thursday that first-time claims for jobless benefits dropped 14,000 to a seasonally adjusted 442,000. That’s below analysts’ estimates of 450,000, according to Thomson Reuters.
But most of the drop resulted from a change in the calculations the department makes to seasonally adjust the data, a Labor Department analyst said. The department updates its methods every year. Excluding the effect of those adjustments, claims would have fallen by only 4,000.
The four-week average of claims, which smooths volatility, dropped 11,000 to 453,750, lowest since September 2008, when the financial crisis intensified.
Initial claims have fallen three of the past four weeks, wiping out most of the increase in the first two months of this year. That increase stoked worries among economists that improvement in the job market was stalling.
First-time claims were elevated last month by snowstorms on the East Coast, which caused backlogs in many state offices that fell behind in processing claims.
Many economists say claims need to fall below 425,000 to signal that the economy will consistently create jobs, though some say it could happen with claims at higher levels. Analysts forecast the nation will gain more than 150,000 jobs in March, partly due to temporary hiring for the Census. The March figures will be reported April 2.
“We believe that the trend in initial claims is signaling that … job creation is imminent,” economists at Bank of America Merrill Lynch wrote before the Labor Department’s report.
Initial claims are considered a gauge of the pace of layoffs and an indication of companies’ willingness to hire new workers.
The number of people continuing to claim unemployment benefits, meanwhile, fell to 4.6 million.
But that doesn’t include millions of people who are receiving extended benefits for up to 73 extra weeks, paid for by the federal government, on top of the 26 weeks customarily provided by the states. Nearly 5.7 million people were on the extended benefit rolls the week ended March 6, latest data available. That is about 300,000 lower than the previous week. The extended benefit figures aren’t seasonally adjusted and are volatile from week to week.
All told, more than 11.1 million people are claiming unemployment benefits, the department said.
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