US jobless claims fall to 15-month low

US jobless claims fall to 15-month low
By Alan Rappeport in New York
Copyright The Financial Times Limited 2010
Published: March 25 2010 13:30 | Last updated: March 25 2010 13:30
http://www.ft.com/cms/s/0/27452d90-3808-11df-9e8e-00144feabdc0.html


The number of Americans claiming unemployment benefits fell to its lowest level since December 2008 last week as accelerating economic output helped slow the pace of job cuts.

Continuing jobless claims fell by 54,000 to 4.65m, labour department figures showed on Thursday. That was better than economists expected and offered hope that the labour market could be stabilising.

Meanwhile, new claims for jobless benefits also fell, declining by 14,000 to 442,000. It was the smallest total in six weeks and brought the less volatile four-week average of initial claims down by 11,000 to 453,750.

“The trend in jobless claims is encouraging for the future direction of the labour market,” said John Ryding and Conrad DeQuadros, economists at RDQ Economics. “However, the level of claims is still too high to signal the emergence of sustained job creation.”

Many states are offering extended jobless benefits and last week the US Senate passed an $18bn jobs bill that offers tax breaks to companies hiring unemployed workers. Companies that hire workers who have been unemployed for at least 60 days will be exempt from paying a 6.2 per cent social security payroll tax until December and if they keep new hires for more than a year they receive a $1,000 tax credit.

Last week, New York, Illinois and North Carolina recorded the biggest drops in jobless claims, while California, Michigan and Iowa continued to see the most filings.

The Federal Reserve expressed some optimism over the labour market in its latest statement, suggesting that the employment situation was “stabilising” rather than deteriorating at a slower pace.

Earlier this week, Janet Yellen, president of the Federal Reserve Bank of San Francisco, said she expected that unemployment would “inch down” but warned that a robust “V”-shaped recovery appeared unlikely.

Thursday’s data come ahead of next week’s closely watched non-farm payrolls report which analysts predict will show the economy creating 200,000 jobs and the unemployment rate holding steady at 9.7 per cent.