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Business Title: Jobless Claims Hit 3-Month Low Of 398,000 WASHINGTON (MarketWatch) — The number of people who filed for jobless benefits fell below 400,000 last week for the first time since early April, a decline likely aided by workers returning to manufacturing jobs after plants were retooled. Still, the decline was welcomed by economists and investors. U.S. stocks rose in recent trading, helped by the claims data and several strong corporate earnings reports. New applications for U.S. unemployment compensation dropped by 24,000 to 398,000, the Labor Department said Thursday. Initial claims from two weeks ago were revised up to 422,000 from an original reading of 418,000. Economists surveyed by MarketWatch had expected new requests for jobless benefits to fall to 413,000 in the latest week. The average of new claims over the past four weeks, meanwhile, declined by 8,500 to 413,750, also the lowest level since April. The monthly average is seen as a more accurate gauge of labor trends because it irons out volatility in the week-to-week data. Claims often fall sharply in the third week of July as workers in certain parts of the manufacturing sector return to their jobs. Auto makers and some other manufacturers usually close plants earlier in the month to retool them to make the latest model of products. As a result, claims data in July can be more volatile than in other months, making it harder to figure out trends in the U.S. labor market. In 2010, for example, jobless claims fell in the same week of July but then rose for the next three weeks. Economists say claims would have to continue to fall to signal definitive improvement in hiring trends. Until the past week, jobless claims had topped the key 400,000 level for four months after hitting a three-year low of 375,000 in late February. Applications usually fall far below 400,000 in a period of rapid hiring. While the decline “is clearly good news, we would prefer to see further data before concluding that the earlier downtrend in claims is being re-established,” said Joshua Shapiro, chief U.S. economist of MFR Inc. The weak economy is largely responsible for the low rate of job creation, but business leaders say the standoff in Washington over how to deal with the federal debt has made them reluctant to hire until the dispute is resolved. The budget battle in Washington might even be affecting consumers, according to Wal-Mart WMT +0.50% Chief Executive Mike Duke. He told lawmakers at a hearing in Congress on Wednesday that customers lack confidence in the economy, part because of the political stalemate. Meanwhile, the Labor Department said the number of Americans who continue to receive state unemployment checks decreased by 17,000 to 3.7 million in the week ended July 16. Continuing claims are reported with a one-week lag. Also, 3.76 million people received extended federal benefits in the week ended July 9, about 62,000 higher compared to the prior week. The U.S. government offers extended relief to most workers who have used up state benefits, which usually last six months. A total of 7.65 million people received some kind of state or federal benefit in the week of July 9, up 320,152 from the prior week. Total claims are reported with a two-week lag.
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