New Jobless Claims Drop More Than Expected
Thursday, August 6, 2009; 10:40 AM
The number of people filing for unemployment benefits for the first time fell last week more than expected, according to data released Thursday morning, the latest indication that the pace of job cuts is easing.
First-time jobless claims for the week ending Aug. 1 fell by 38,000 to 550,000, according to a Labor Department report. Economists had been expecting a drop of 4,000.
The four-week moving average, which is a less volatile measure, decreased by 4,750 to 560,000, the lowest level since January. The four-week moving average has now fallen for six consecutive weeks.
Last week's data were largely free of the distortions caused by the timing of auto layoffs that had affected jobless claims in recent weeks. Several states reported fewer layoffs in manufacturing, construction and automotive production.
Although the pace of job cuts is slowing, the picture remains bleak for those out of work. The unemployment rate is expected to hit 10 percent by the end of the year, a first in more than 25 years.
Currently, it stands at 9.5 percent. But analysts expect the rate to rise to 9.6 percent when the Labor Department releases its employment report for July on Friday.