US jobless claims fall as jobs market improves

The number of Americans filing new claims for unemployment benefits fell last week, pointing to moderate job growth despite slowing economic activity.

Initial claims for state unemployment benefits declined 11,000 to a seasonally adjusted 346,000, the Labour Department said today. Claims for the prior week were revised to show 3,000 more applications received than previously reported.

Economists polled by Reuters had expected first-time applications to fall to 345,000 last week.

A Labour Department analyst said no states had been estimated and there was nothing unusual in the state-level data. Last week’s data included the Memorial Day holiday and claims typically fall around this time of the year.

The four-week moving average for new claims, which irons out week-to-week volatility, rose 4,500 to 352,500.

Although claims have been volatile in recent weeks, there is little in the numbers to suggest a shift in the moderate pace of job gains, even as the broader economy is struggling under the weight of higher taxes and deep government spending cuts.

Last week’s data has no bearing on today’s employment report for May as it falls outside the survey period.

Employers are forecast to have added 170,000 jobs to their payrolls last month, slightly up from April’s 165,000 count, according to a Reuters survey. The unemployment rate is seen holding at four-year low of 7.5 per cent.

The labour market is being closely watched for clues to when the Federal Reserve might start scaling back its expansive monetary stimulus.

Fed Chairman Ben Bernanke said last month a decision to start tapering the $85 billion in bonds the US central bank is buying each month could come at one of its “next few meetings” if the economy appeared set to maintain momentum.

The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid fell 52,000 to 2.95 million in the week ended May 25th. The four-week average for the so-called continuing claims was the lowest since May 2008.

Data released earlier today showed Greece’s jobless rate rose again in March, reflecting the pain of a crippling recession after years of austerity under the country’s international bailout.

Record joblessness is a major angst for Greece’s coalition government as it scrambles to hit fiscal targets and show there is light at the end of the tunnel after years of unpopular tax rises and cuts to wages and pensions.

Unemployment rose to 26.8 per cent from a downwardly revised 26.7 per cent reading in February, according to statistics service data released today, and is more than twice the average rate in the euro zone which hit 12.2 per cent in April.

“It’s long-term unemployment that is the most worrisome as the per centage is higher than 60 per cent,” said economist Angelos Tsakanikas at think tank IOBE, adding that the proportion of jobless people out of work for more than a year had been around 45 per cent in 2008.

Those aged 15 to 24 remain the hardest-hit, even though the jobless rate for that age group eased to 58.3 per cent in March from 64.2 per cent in February.

Reuters