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 eased 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 yesterday that new claims for unemployment insurance dropped last week to a seasonally adjusted 521,000, better than analysts expected and down from 554,000 the previous week.
The four-week average, which smooths fluctuations, fell to 539,750, the lowest since Jan. 17. The number of people continuing to claim benefits declined by 72,000 to 6.04 million. Analysts expected continuing claims to rise slightly.
"The downtrend in claims is encouraging and points to continued, albeit gradual, improvement in the labor market," Joseph LaVorgna, chief U.S. economist at Deutsche Bank, wrote in a note to clients.
Economists closely watch initial claims, which are considered a gauge of layoffs and an indication of companies' willingness to hire new workers. Initial claims remain well above the 325,000 that economists say is consistent with a healthy economy.