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Published: Thursday, 4/21/2011 - Updated: 3 years ago

Fewer people applied for unemployment benefits last week

ASSOCIATED PRESS

WASHINGTON — Fewer people applied for unemployment benefits last week, partly reversing a sharp jump in applications the previous week.

The Labor Department said Thursday that the number of people applying for unemployment benefits dropped 13,000 to a seasonally adjusted 403,000 in the week ending April 16. The decline comes after applications rose 31,000 a week earlier.

Applications near 375,000 are consistent with sustainable job growth. Applications peaked during the recession at 659,000.

The four-week average, a less volatile measure, rose for the second straight week to 399,000. That's about 10,000 higher than it was a month ago.

Economists said that the previous week's jump in applications was influenced to some degree by a seasonal quirk that is difficult to adjust for at the start of each quarter. Many workers delay filing their applications until the new quarter begins, if that means they will receive a higher level of benefits.

"Normally, most of any upward effect from this factor is reversed within a couple of weeks," said Joshua Shapiro, chief U.S. economist at MFR, Inc.

The rise could also be partly due to disruptions in the U.S. auto industry stemming from the earthquake and tsunami in Japan, some economists said. Several states reported layoffs had risen in the auto and manufacturing industries. Toyota Motor Co., Nissan and Ford Motor Co., have said in recent weeks that they are slowing production this month because they can't obtain enough auto parts, many of which are imported from Japan.

The report covers the same week that the Labor Department conducts its survey of employer payrolls. That survey is used to calculate whether the economy is adding jobs each month, and how many.

Many economists are expecting April's employment report to be similar to the past two months, even with the previous week's increase in unemployment benefit applications. Businesses added more than 200,000 jobs for the second straight month in March, the biggest two-month hiring spree in five years. The unemployment rate fell to a two-year low, at 8.8 percent.

"The broad similarity between March and April developments should point to a roughly similar payroll-employment outcome — on the critical presumption that new hiring occurs at roughly the same pace," Pierre Ellis, an economist at Decision Economics, wrote in a note to clients. "Optimism on that front has often been disappointed — but the March numbers did hint at a clear turn for the better."

The four-week average has fallen about 7 percent since late January, but applications have plateaued in recent weeks. Most economists expect applications to continue declining as the economy improves.

The total number of people receiving unemployment benefits ticked down to 3.7 million. But that doesn't include millions of the unemployed who are getting benefits under emergency programs enacted by Congress during the recession. Including those programs, 8.3 million people received unemployment benefits during the week ending April 2, the latest data available. That's a drop of more than 200,000 from the previous week.



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