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Initial jobless claims drop to more than five-year low of 324,000

Published: Friday, May 3, 2013 9:58 a.m. CDT

(MCT) WASHINGTON — Initial jobless claims dropped last week to their lowest level in more than five years, countering recent signals that the economic recovery is slowing.

The number of people filing for the first time for unemployment benefits fell to 324,000 for the week ending Saturday, from a revised 342,000 the previous week, the Labor Department said Thursday.

The last time weekly jobless claims were that low was in January 2008, as the Great Recession had just begun.

The drop surprised analysts, who had expected about 345,000 new claims. The figure has tumbled significantly over the past few weeks and could indicate stronger-than-expected job growth when the government releases its April unemployment report on Friday.

Initial claims below 350,000 is a sign of moderate growth in the labor market.

The weekly figures can be volatile, but the four-week average also has been falling. It was 342,250 last week, down 16,000 from the previous week.

In another positive sign, planned private-sector job cuts fell last month to the lowest level since December, according to outplacement firm Challenger, Gray & Christmas, Inc.

Employers announced plans to cut 38,121 jobs in April, down 23 percent from the previous month, the company’s monthly report said.

“The economic slowdown that began late in the third quarter and is expected to turn into another summer slump has yet to result in increased or widespread downsizing,” said John A. Challenger, the firm’s chief executive.

“The biggest concern is that consumers, who had been holding up the economy for so many months, are starting to scale back their spending as wages continue to stagnate,” he said.

Economists expect the government to report job growth picked up last month after a disappointing 88,000 net new jobs were added in March. The median estimate of economists surveyed by Bloomberg News is that the U.S. economy added 148,000 jobs in April.

Some doubts were cast on that view Wednesday after payroll processing firm Automatic Data Processing Inc. said private-sector job growth slowed in April.

The company said employers added 119,000 net new workers, down from 131,000 in March.

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©2013 Los Angeles Times

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