WASHINGTON — The number of newly laid-off workers filing first-time claims for jobless benefits fell to the lowest level since early January, as layoffs ease a bit amid a fledgling economic recovery.
The fourth drop in new claims in five weeks is a sign the labor market is slowly healing. But employers are reluctant to hire new workers and the unemployment rate is expected to keep climbing well into next year.
The Labor Department said Thursday that new claims for unemployment insurance dropped last week to a seasonally adjusted 521,000, from the previous week's upwardly revised total of 554,000.
That's better than the 540,000 that Wall Street economists expected, according to a survey by Thomson Reuters.
The four-week average, which smooths fluctuations, fell to 539,750, the lowest since Jan. 17.
Economists closely watch initial claims, which are considered a gauge of layoffs and an indication of companies' willingness to hire new workers.
Thursday's total is the second lowest this year. Claims have been slowly declining since the spring, but remain well above the 325,000 that economists say is consistent with a healthy economy.
The number of people continuing to claim benefits declined by 72,000 to 6.04 million. Analysts expected continuing claims to rise slightly.
When federal emergency programs are included, the total number of jobless benefit recipients dropped by about 90,000 to 8.9 million in the week that ended Sept. 19, the latest data available. Congress has added up to 53 extra weeks of benefits on top of the 26 typically provided by the states, and is considering adding another 13 weeks.
Many analysts expect the economy grew as much as 3 percent in the July-September quarter, but most employers are expected to hold back on new hires while they wait to see if such growth can be maintained.
The unemployment rate rose to 9.8 percent in September from 9.7 percent, the department said last week, as employers cut 263,000 jobs. The recession, the worst since the 1930s, has eliminated a net total of 7.2 million jobs.
Federal Reserve Chairman Ben Bernanke said last week that even if the economy maintained a 3 percent growth rate for several quarters, unemployment would still be above 9 percent by the end of 2010.
More job cuts were announced this week. Thermo Fisher Scientific Inc., which makes industrial and scientific equipment, said it will close a plant in Dubuque, Iowa, next year, costing 350 jobs.
Among the states, California had the largest increase in claims, with 4,467, which it attributed to layoffs in the construction and service industries. Ohio, Illinois, Missouri and Tennessee had the next largest increases. State data lag the initial claims figures by one week.
New York had the largest drop in claims, with 2,253, which it attributed to fewer layoffs in construction and services. North Carolina, South Carolina, Arkansas, and Florida had the next largest declines.