The number of U.S. workers filing new claims for jobless aid fell 12,000 last week, Labor Department data showed on Thursday, while so-called continued claims rose to a fresh record as the recession battered employment.
Initial claims for state unemployment insurance benefits declined to a seasonally adjusted 631,000 in the week ended May 16 from a revised 643,000 the prior week, the Labor Department said. New claims have declined in three of the last four weeks.
Analysts polled by Reuters had forecast 630,000 new claims versus a previously reported count of 637,000 the week before.
U.S. stock index futures added to losses after the data, while U.S. government bond prices were higher and the dollar was unchanged.
I think the numbers continue to show a weak economy, said Subodh Kumar, chief investment strategist at Subodh Kumar & Associates in Toronto.
The companies that bring their costs under control will be the first to start hiring, but I don't think we'll see that a lot until the third or fourth quarter, he said.
The most severe U.S. recession in decades has already cost over 5 million jobs since it began in late 2007, and despite recent declines in the claims data suggesting the pace of deterioration in employment conditions is slowing, the labor market remains in dire shape.
The number of people staying on benefit rolls after drawing an initial week of aid increased by 75,000 to a more-then-forecast 6.662 million in the week ended May 9, the most recent week for which data is available. Analysts estimated so-called continued claims would be 6.65 million.
It was the 16th consecutive week that continued claims had risen to a fresh record high and this pushed the seasonally adjusted insured unemployment rate to 5.0 percent from 4.9 percent the week before, the Labor Department said.
But the four-week average of new jobless claims, a closely watched gauge of underlying labor trends because it irons out week-to-week volatility, fell to 628,500 from 632,000 the week before. The four-week average has now dropped in five out of the last six weeks.
I am pleased that we've got the four-week average in jobless claims beginning to move down again, said John Ryding, chief economist at RDQ Economics in New York.
But I still think we need a more convincing decline to signal from the jobless claims perspective that the recession has bottomed out, Ryding said.
A Labor Department official said there were no special factors affecting last week's numbers. A number of states that reported increased claims from automobile industry layoffs the week before showed declining claims last week, he said.
(Additional reporting by Ryan Vlastelica and Burton Frierson in New York; editing by Neil Stempleman)