Government data released Thursday indicated that layoffs eased again last week, another encouraging sign for the job market a day before closely-watched monthly statistics are set to be released.
This is the latest in a recent string of releases that have suggested that steep job losses could begin to flatten out soon, as the pace of economic contraction shows signs of slackening.
The U.S. Labor Department said initial jobless claims, a closely-watched gauge of layoffs, dropped to 601,000 for the week ended May 2nd. This was down 34,000 from the previous week's revised forecast of 635,000.
The result was better than the average forecast of economists, who had generally expected 635,000 new claims.
Last week's total marked the lowest reading for jobless claims since January. The number of claims have been drifting lower since reaching their recent high of 674,000 in late March.
The 4-week moving average for initial claims, a statistic that flattens out week-to-week fluctuations in the data, fell to 623,500 from the previous week's revised level of 638,250.
The number of people receiving ongoing unemployment help, a statistic known as continuing claims, climbed to another record high, suggesting that it is still difficult for people to find new jobs once they have been laid off.
Continuing claims rose 56,000 to 6.351 million for the week ended April 25, the most recent week for which the government has data. The increase was the smallest since February, possibly pointing to a slowdown in the upward march. The last time continuing claims showed a decline was the week of January 3rd.
In general, the recent claims data have suggested that companies have eased their efforts to cut jobs, but have not begun to hire yet.
Another report released earlier this week contributed to the general sense that the massive job losses could be easing.
On Wednesday, payroll processor Advanced Data Processing said that private-sector employment fell by 491,000 in April, moderating after the revised drop of 708,000 jobs in March. The ADP result was better than analysts had expected and marked the smallest monthly decrease since a loss of 352,000 jobs in October of last year.
Friday will see the release of the government's monthly employment statistics, considered by many to be the most important set of economic data. Going into this week, economists were looking for another payroll decline of more than 600,000 following the drop of 663,000 in March.
The unemployment rate has been seen rising to 8.9 percent from the 8.5 percent recorded for March.
With the ADP report and the better-than-expected reading for initial claims, however, there is hope that the government data will come in lower than the official estimates of economists.
by RTT Staff Writer
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