Initial Jobless Claims Drop to Lowest Level in More than Five Years

The Labor Department reported Thursday morning that the number of Americans filing for first-time jobless benefits dropped by 18,000 to 324,00 in week ended April 27 from a revised 342,000 claims (up from 339,000) the week earlier. The decline in claims took the figure to its lowest level since January 2008.

Economists were expecting a mild increase in claims during the week to 346,000.

The four-week moving average of claims, a less-volatile measure of the jobs market, decreased 16,000 to 342,250, marking the lowest level in six weeks.

The Labor Department said that there was nothing unusual in the latest data and that no state’s figures were estimated. Claims can be particularly volatile during the month of April because of the impact of school vacations and the Easter holiday that doesn’t fall during the same week each year. A Labor Department said last week that the volatility usually begins to wane in May.

Continuing claims, or those people already receiving benefits, increased by 12,000 to 3.02 million for the week ended April 20. Continuing claims are reported with a two-week lag and exclude recipients of extended benefits under federal programs.

The total number of people receiving benefits in all programs for the week ended April 13 decreased 108,631 to 4.96 million. Total claims are reported at a three-week lag.

The seasonally adjusted insured unemployment rate was 2.3 percent in the week ended April 20, unchanged from the week earlier.

Initial jobless claims are a gauge of weekly lay-offs, tending more inversely to expansion in the labor market. The true measure of this relationship will be coming when the Labor Department delivers its monthly report of nonfarm payrolls and the unemployment rate for April on Friday. The decrease in new jobless claims indicates that companies are feeling comfortable maintaining staffing levels, but economists will be looking at their willingness to hire additional people as the measure of the strength of the economy.

Income tax hikes as a result of the so-called sequester earlier this year have been partially attributed to corporate reluctance in boosting the number of employees in addition to signs of the U.S. economy limping along.

In March, the U.S. created only 88,000 new jobs. The unemployment rate edged down to a four-year low of 7.6 percent in the month from 7.7 percent in February, but that was only the result of more people gave up on seeking employment. Economists are expecting nonfarm payrolls to grown to by about 151,000 in April.