The number of newly laid-off workers seeking unemployment benefits fell for the third straight week, evidence that layoffs
are continuing to ease in the earliest stages of an economic recovery.
The Labor Department said Thursday that
initial claims for unemployment insurance dropped to a seasonally adjusted 530,000 from an upwardly revised 551,000 the previous
week. Wall Street economists expected claims to rise by 5,000, according to a survey by Thomson Reuters.
layoffs "would be an important sign of improvement … lessening the critical threat to consumer spending — and
to the overall economy — represented by falling employment," Pierre Ellis, an economist at Decision Economics,
wrote in a report to clients.
The Federal Reserve said Wednesday that spending "remains constrained by ongoing
job losses," tight credit and falling home values. But consumer spending, which makes up 70 percent of the U.S. economy,
could improve as workers feel more secure about their jobs.
Meanwhile, sales of existing homes dipped unexpectedly
last month after four straight gains, a sign the housing market recovery remains fragile.
The National Association
of Realtors said sales dropped 2.7 percent, to a seasonally adjusted annual rate of 5.1 million in August. Sales had been
expected to rise to an annual pace of 5.35 million, according to economists surveyed by Thomson Reuters. The median sales
price fell to $177,700, down 12.5 percent from the same month last year.
The four-week average of jobless claims,
which irons out fluctuations, dropped to 553,500. That’s the lowest since late January, though still far above the 325,000
weekly claims typical in a healthy economy.
Economists closely watch initial claims, which are considered a gauge
of layoffs and an indication of companies’ willingness to hire new workers.
The four-week average has fallen by
about 100,000 since reaching a peak for the current recession in early April. Economists say initial claims below 400,000
would be a signal that employers are adding to the net total of jobs.
The number of people continuing to claim
benefits for more than a week dropped 123,000, to a seasonally adjusted 6.14 million.
But when federal emergency
programs are included, the total number of jobless benefit recipients was about 9 million in the week that ended Sept. 5,
down slightly from the previous week. Congress has added up to 53 extra weeks of benefits on top of the 26 typically provided
by the states. The House this week approved legislation that would add another 13 weeks in high-unemployment states.
The large number of people remaining on the rolls indicates unemployed workers are having a hard time finding new jobs.
Most analysts expect the economy, bolstered by government stimulus efforts, will grow at a healthy clip in the current
July-September quarter, technically ending the recession. But many economists also agree with Fed Chairman Ben Bernanke, who
said earlier this month that growth isn’t expected to be strong enough to reduce the jobless rate for some time.
The Fed said Wednesday that economic activity "has picked up," and the central bank kept the interest rate it
controls at its record low of nearly zero.
The recession, which began in December 2007 and is the worst since the
1930s, has eliminated a net total of 6.9 million jobs.
More job cuts were announced this month. Health insurer
WellPoint Inc. said this week it may eliminate more positions in an effort to become more efficient, though the company didn’t