First-time jobless claims drop for second week

WASHINGTON — New claims for unemployment insurance fell for the second straight week, fresh evidence the job market is slowly improving.

Still, the declines come after a sharp increase three weeks ago, and claims remain at elevated levels.

The Labor Department said Thursday that initial claims for jobless benefits dropped last week by 10,000 to a seasonally adjusted 453,000. That nearly matches analysts' forecasts, according to Thomson Reuters.

Initial claims are closely watched by economists because they are considered a gauge of layoffs and a measure of companies' willingness to hire new workers.

After falling steadily in the second half of last year, claims have leveled off and are now only slightly below the level they were at the beginning of this year. That's raised concerns among some economists that hiring is still sluggish.

The four-week average, which smooths volatility, rose for the third straight week to 459,000. That's down by only 8,000 from its level in mid-January.

Claims above 400,000 are generally associated with a shrinking economy. But many economists attribute the current high level of claims to another cause.

They say it reflects a greater willingness by laid-off workers to seek unemployment benefits. In a healthier economy, workers who lose jobs expect to find another one quickly and don't necessarily file for jobless aid.

But according to this view, after a deep recession, people who lose their jobs are more likely to request benefits and claims stay elevated even as the economy recovers.

Employers are starting to ramp up hiring as the economy recovers from the worst recession since the 1930s, but not quickly enough to bring down the jobless rate. Unemployment rose to 9.9 percent in April from 9.7 percent the previous month, even as the economy generated 290,000 jobs.

The rate rose partly because nearly a million people began or resumed job searches that month, increasing the size of the labor force.

The number of people continuing to claim benefits rose by 31,000 to 4.67 million, according to Thursday's report. Analysts had expected the total benefit rolls to remain level.