Fewer US workers made first-time claims for jobless benefits last week, giving hope that accelerating economic growth would soon translate into job creation, official figures showed on Thursday.
Initial jobless claims fell by 11,000 to 448,000, according to the Department of Labor. Analysts were hoping for a bigger fall, but the decline brought claims to the lowest level in a month.
However, the less volatile four-week average of jobless claims remains elevated and rose last week by 1,500 to 462,500. Economists argue that claims need to fall to the low 400,000 level before US employers will begin adding consistently to payrolls.
“Though the drop-back in claims is encouraging, the overall rate of improvement has stalled since March,” economists at Action Economics noted. “Painfully, the stall-point sits right around levels consistent with a flat trend for private payrolls.”
Meanwhile, those continuing to claim unemployment benefits declined by 18,000 to 4.64m. While welcome, that does not include people who have fallen off the benefits rolls or those receiving emergency jobless insurance funds.
On Wednesday, the Federal Reserve sounded more upbeat in its assessment of the jobs market, saying in a statement that the labour market is “beginning to improve”. Previously it had said that unemployment was stabilising.
States showing the biggest declines in jobless claims included New York, Pennsylvania and California, while Georgia and Iowa saw more job cuts in their manufacturing sectors.
Next Friday, the Department of Labor will release its April non-farm payrolls report, which economists expect will show the US economy added 175,000 jobs with the unemployment rate holding steady at 9.7 per cent.
“While headline payrolls will likely be dominated in April by hiring related to the 2010 census, employment-related data on balance point to only a modest increase in private payrolls in the month,” said John Ryding and Conrad DeQuadros, of RDQ Economics.