In what could probably be seen as the latest indication of the country coming out of the recession, first-time applicants for state jobless benefits showed a sharp drop last week. This reverses a trend showing gains over the past few weeks.
Initial claims for jobless benefits fell 43,000 to a seasonally adjusted 440,000 in the week ended Feb. 6, the US Labor Department said in its weekly report Thursday.
Claim totals for the previous week were revised slightly higher to 483,000 from 480,000. Analysts had forecast initial claims to fall by a less steep pace to 465,000.
Last week’s larger-than-expected increase was blamed on a backlog of claims from the holiday season. A Labor Department official cautioned that this most recent report reflected a normalization of claims after the backlog was cleared.
The number of those continuing on jobless benefit rolls also slid to 4.54 million for the week ended Jan. 30, down 79,000 from 4.62 million.
The four-week average of new claims, which aim to smooth volatility in the data, fell by 1,000 to 468,500.
The unemployment rate for workers with unemployment insurance was unchanged at 3.5%.
Not adjusted to reflect seasonal fluctuations, Pennsylvania reported the largest jump in new claims during the Jan. 30 week due to an increase in layoffs in the construction, trade and service sectors.
New Jersey reported the largest decrease due to fewer layoffs in trade and service industries.
The fastest pace of growth in six years last quarter means the economy may be poised to add jobs as companies restock shelves to keep pace with increased sales, reports indicated. At the same time, with an unemployment rate projected to average almost 10 percent this year, consumer spending may be slow to recover.
The unemployment rate in the U.S. unexpectedly dropped to 9.7 percent in January, while payrolls declined by 20,000, Labor Department figures showed Feb. 6. Manufacturers added to payrolls for the first time in three years and that may provide some spark to revive the rest of the labor market.