New claims for jobless benefits in the US fell last week but still remain above the level economists have said is necessary to create jobs.
Initial jobless claims fell by 6,000 to 472,000, labour department figures showed on Thursday. Economists had expected claims to fall to 470,000 from the 473,000 level originally reported the prior week, which was revised to 478,000 on Thursday. The less volatile four-week average also declined, falling back 2,500 to 485,500.
The data “underscore that the labour market remains very weak. The claims numbers continue to be at higher levels than you would expect given the payroll results”, said Joshua Shapiro, chief US economist at MFR. “I don’t see the overall economy growing.”
The report comes ahead of Friday’s closely watched government unemployment report, which is expected to show that the US economy shed 80,000 jobs in August. The unemployment rate is forecast to rise slightly to 9.6 per cent.
On Wednesday, a report from ADP Employer Services said that the private sector cut 10,000 workers last month, the first monthly decline this year, as small and mid-sized businesses came under pressure.
The number of people continuing to claim unemployment insurance fell by 23,000 to 4.456m as long-time idle workers saw their benefits expire.
Claims for emergency benefits also declined, falling 281,676 to 4.546m
The biggest declines in claims came in California, Ohio and Michigan, while Florida, Iowa and Maryland saw the largest increases.
Economists said claims need to fall to the low 400,000 level before the economy can sustainably create jobs.
By Shannon Bond – ft.com
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