Economy

First-time jobless claims drop slightly

by Vicki Needham - 10/13/11 2:20 PM ET

Economists said claims for benefits need to drop below 375,000 to indicate a healthy job market, more jobs and a lower unemployment rate.

Applications fell to 375,000 in February and stayed below 400,000 for two months, before hitting an eight-month high of 478,000 in April.

Employers pulled back on hiring this spring and into the summer as uncertainty about Europe’s economies rocked U.S. stock markets, prices for gas and food rose, tugging on consumer spending and a March earthquake interrupted auto and other supply chains, slowing U.S. auto production.

The economy generated 103,000 net jobs in September, well below what is needed to lower the unemployment rate — which stayed at 9.1 percent for the third straight month — but a big enough increase to quell a rising tide of recessionary fears as the economy has stagnated during the past several months.

The total number of people claiming benefits in all programs for the week ending Sept. 24 was 6.8 million, a decrease of 39,203 from the previous week.

The number of people receiving unemployment benefits dropped by 55,000 to 3.67 million, the lowest since April.

Those who’ve used up their 26 weeks of state benefits and are now collecting federal emergency and extended payments increased by about 2,300 to 3.55 million in the week ended Sept. 24, the Labor Department said.

In a separate report on Wednesday, the Labor Department said companies posted fewer jobs in August than in July, the first decrease in four months.

Even as companies remain reluctant to hire, employers laid off 1.66 million people in August, fewer than July and well below the recessionary high of 2.5 million, the Labor Department’s report said.

Extended benefits were available in Alabama, California, Colorado, Connecticut, Delaware, the District of Columbia, Florida, Georgia, Idaho, Illinois, Indiana, Kansas, Kentucky, Maine, Massachusetts, Michigan, Minnesota, Missouri, Nevada, New Jersey, New Mexico, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, Tennessee, Texas, Washington, West Virginia and Wisconsin during the week ending Sept. 24.