Initial jobless claims declined more than forecast last week and showed their biggest drop since February, in a hopeful sign for the United States labor market.
The number of Americans filing for first time unemployed benefits dropped sharply to 404,000 from a downwardly revised reading of 441,000 in the previous week, the Labor Department said on Thursday.
The 37,000 drop in claims was the biggest since the week that ended Feb. 6, when claims fell by 51,000. Analysts had expected last week’s jobless claims to fall to 420,000.
The chief economist at FTN financial in NEW YORK was caught saying that the pace of the layoffs is very slow and that the hirings were frustratingly slow in the last three months.
A Labor Department official said the larger-than-expected decline was partly explained by jobless claims returning to trend after the big rise the earlier week.
The Labor Department data corresponds to the survey week for the government’s closely watched report on employment, which will be released on Feb 4. The jobless rate has remained stubbornly high, and was reported at 9.4 percent in December.
Economists said that getting the four-week average for new jobless claims below 400,000 would be an important signal that the lofty unemployment rate was set to come down.
Continuing claims fell to 3.86 million in the week ended on Saturday, the lowest level in over two years.
However, the total number of Americans on benefit rolls, including extended benefits under emergency government programs, jumped to 9.6 million in the week ended Jan. 1, from 9.2 million the previous week.
Figures follow a report last week showing the U.S. added fewer jobs than forecast in December, underscoring the concern of Federal Reserve policy makers about the labor market. Economic growth may need to accelerate further and encourage companies to ramp up the hiring necessary to reduce the unemployment rate.
Initial jobless claims rose by 35,000 to 445,000. The number of people continuing to receive jobless benefits fell by 248,000 in the week ended Jan. 1 to 3.88 million, the lowest level since Oct. 25, 2008. Those who’ve use up their traditional benefits and are now collecting emergency and extended payments increased by about 128,000 to 4.64 million in the week ended Dec. 25.
It could take four to five more years for the job market to normalize fully. A company named, Synovus Financial Corp., a Columbus, Georgia-based bank, on Jan. 10 said it plans to cut about another 850 positions this year to streamline operations and save money. The company eliminated 300 jobs in 2010.
So guys before thinking about going and working in another country just with the thinking that you would be earning more, please take a look at the situation very carefully.