New claims for unemployment insurance inch down
New claims for unemployment benefits dipped for the fourth straight week, a sign the job market is improving at a slow but steady pace.
Employers, encouraged by a recovering economy, are hiring again. But they are not doing it at the level needed to reduce the jobless rate.
The Labor Department said Thursday that initial claims dropped last week by 4,000 to a seasonally adjusted 444,000. That's slightly above analysts' estimates, according to Thomson Reuters. The previous week's total was revised up to 448,000.
The four-week average, which smooths out volatility, registered a steeper decline. It fell by 9,000 to 450,500 — close to the average's lowest level this year reached in late March.
After dropping steadily last year from a peak of 651,000, first-time claims have fluctuated at around 450,000 since January. Many economists would like to see claims fall faster, which would be a sign of more hiring.
"We expect claims to continue to move lower over the coming weeks and will feel more comfortable about the prospects for sustainable job creation when claims drop below the 400,000 mark," economists at RDQ Economics said in a note to clients.
David Resler, chief economist at Nomura Securities, noted that the claims figure is the third lowest since Lehman Brothers collapsed in September 2008, intensifying the financial crisis.
The stock market dipped after the report. The Dow Jones industrial average fell 21 points in morning trading, while other indexes were mixed.
Other recent indicators have shown improvement in the job market. Employers added 290,000 jobs in April, the most in four years. That's a positive sign that companies are confident enough in the economic recovery to step up hiring.
But much more hiring is needed to make up for the loss of more than 8 million jobs in the recession. The unemployment rate rose last month to 9.9 percent as the new jobs weren't enough to offset the more than 800,000 people that started or resumed job searches.
The economy expanded at a 3.2 percent pace in the January-to-March quarter, the third straight quarter of growth. That followed four quarters of decline as the economy struggled through the worst downturn since the 1930s.
One of the companies hiring is Cisco Systems Inc. John Chambers, CEO for the computer networking equipment maker, said Wednesday the company hired 1,000 new people in the quarter ending May 1. He expects the pace of hiring at his company will pick up.
Others are still laying off workers. Dean Foods Co., which makes Horizon Organic milk and other soy products, said earlier Monday that it plans to cut 350 to 400 jobs, on top of 150 eliminated earlier this year.
The number of people continuing to receive benefits, meanwhile, rose by 12,000 to 4.6 million. The data on continuing unemployment claims lags initial claims by one week.
But that doesn't include the 5.4 million people receiving extended benefits paid for by the federal government in the week ending April 24, the latest data available. That total is down by about 200,000 from the previous week.
The extended federal benefits have added as many as 73 weeks of unemployment on top of the 26 customarily provided by the states. But jobs have been scarce for so long that many of those out of work will soon run out of those extended benefits