The number of workers filing new claims for jobless benefits continued to fall last week, bolstering expectations that claims appear to be back on a clear downward trend as the labor market slowly heals.
The Labor Department said in its weekly report Thursday that initial claims for jobless benefits declined by 6,000 to 439,000 in the week ended March 27. The previous week’s level was revised upward to 445,000 from 442,000. Economists surveyed by Dow Jones Newswires expected initial claims to decrease by 2,000.
The four-week moving average, which aims to smooth volatility in the data to help paint a better picture of the underlying trend, fell to the lowest level since Sept. 13, 2008 for the week ending March 27. The Labor Department said the four-week moving average went down by 6,750 to 447,250 from the previous week’s revised average of 454,000.
Total claims lasting more than one week, meanwhile, declined to levels last seen in December 2008.
The latest decline in jobless claims falls in line with economists’ expectations that claims are finally back on a downward path after being stuck in a lull since the beginning of the year. Even if unemployment figures start to show some improvement, however, economists and other experts also don’t expect to see major gains in labor market conditions for 2010.
Forecasters are expecting the national 9.7% unemployment rate in Friday’s monthly jobs report to hold steady, suggesting the pace of new hiring is still slow. And any gains that may be shown in the March job figures may not suggest a full turnaround since some of it may be driven by temporary things like government hiring for the Census.
In addition, a report this week by Automatic Data Processing Inc. and consultancy firm Macroeconomic Advisers actually reported an unexpected 23,000 decline in private-sector jobs when forecasters surveyed by Dow Jones had expected to see a 50,000 gain.
As a response to the unemployment situation, the Obama administration recently unveiled a series of expansions to foreclosure prevention programs that target in part unemployed Americans.
One program, known as the Home Affordable Modification Program or HAMP, would let unemployed homeowners that meet certain criteria temporarily reduce their mortgage payments to an affordable level while they look for work.
Congress has also sought to respond to the jobs crisis with several legislative packages. One bill, which was passed recently by the U.S. Senate, would provide tax credits to workers who hire the unemployed. Another proposal still in the works is a bill to provide tax credits to small businesses. That proposal was approved by the U.S. House, but still must be voted on by the Senate.
In the Labor Department’s Thursday report, the number of continuing claims — those drawn by workers for more than one week in the week ended March 20 — decreased by 6,000 to 4,662,000 from the preceding week’s revised level of 4,668,000.
The unemployment rate for workers with unemployment insurance for the week ended March 20 was 3.6% — unchanged from the prior week’s rate.
The largest increase in initial claims for the week ended March 20 occurred in Illinois due to layoffs in the construction, trade, and manufacturing sectors. The largest decrease in claims occurred in California.
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