U.S. Jobless Claims Fall To 346,000; Continuing Claims Rise By 91,000

July 10, 2008 10:56 a.m. EST

Washington, D.C. (AHN) - The number of individuals filing initial jobless claims for unemployment insurance declined last week, but the labor market continued to stay weak, a U.S. Labor Department report said.

The drop in first-time jobless claims reflect some improvement in the U.S. economy, which has already suffered by the subprime contagion, amid weak consumer confidence and rising gas prices.

U.S. weekly initial jobless claims for insurance fell by 58,000 to 346,000 on a seasonally-adjusted basis in the week ending July 5, according to the Labor Department on Thursday.

While, the four-week average, which is a less volatile measure, of initial jobless claims declined by 10,000 to 380,500 in the first week of July and compared to 390,500 in the week prior.

The four-week average was between 300,000 and 325,000 for much of 2007, a sign of healthy job growth, while it was below 350,000 for most of the first quarter this year.

Any figure above 350,000 indicates that the labor market is weak; the weekly jobless claims has remained at above that level since the month of April this year.

The number of continuing jobless claims increased by 91,000 to 3.2 million for the week ending June 28, which is the highest level since the last week in December 2003.

The four-week average of continuing unemployment claims also gained by 16,500 to 3.13 million, the highest level seen in more than four years.

The market analysts surveyed by Bloomberg had projected claims to drop to 395,000, according to the median of 41 projections with estimating ranging from 370,000 to 420,000.

Last month, the unemployment rate jumped to 5.5 percent, up from 5 percent in May and April, led by the declining jobs in manufacturing, construction, goods-producing industries and business services.

The Labor Department report Thursday showed the unemployment rate for workers with unemployment insurance, which tends to track the U.S. jobless rate, increased to 2.4 percent from 2.3 percent.

The report also said there were 25 states and territories registering an increase in initial jobless claims, while 28 reported a decrease in jobless claims for the June 28 week. These data are reported with a one-week delay.

Over a six months period, payrolls have declined for a loss of 438,000 workers and the payroll in April and May was revised to 52,000 more jobs.

The U.S. economy has lost jobs every month since the beginning of this year and it shed as much as 62,000 in the month of June, and up to 49,000 jobs in May.

Last year, the economy created as many as 91,000 new jobs each month on average.