Christopher S. Rugaber, AP Economics Writer
WASHINGTON (AP) — New requests for unemployment benefits fell sharply last week, the first decline in a month and a hopeful sign after a raft of negative economic reports.
New claims for jobless aid dropped by 31,000 to a seasonally adjusted 473,000, the Labor Department said Thursday. Still, claims remain much higher than they would be in a healthy economy. Employers are reluctant to hire as economic growth appears to be slowing.
The drop comes after a steep rise the previous three weeks that sent claims to their highest level in nine months. Those increases raised fears that businesses were starting to layoff more workers.
Wall Street economists had expected a smaller drop, according to surveys by Thomson Reuters. Stock futures rose immediately after the report's release.
Even with last week's decline, the four-week average, a less volatile measure, rose to 486,750, the most since November 2009.
The department also said the total unemployment benefit rolls climbing steeply, as more people join extended unemployment aid programs that were renewed last month by Congress. During the recession, Congress added up to 73 weeks of emergency aid on top of the 26 weeks typically provided by the states.All told, about 10.1 million people were receiving unemployment checks in the week ended Aug. 7, the latest data available. That's up about 260,000 from the previous week.
The economy has grown for four straight quarters. But the pace has slowed from a 5 percent annual rate in last year's fourth quarter to 3.7 percent in the January-to-March period. It has weakened even further in the past several months.
Many economists expect the government Friday to revise lower its growth estimate for the April-June quarter to below 2 percent. That's weak in normal times and even worse after such a steep recession.
The housing sector, which usually helps power economic recoveries, is now acting as a drag. New home sales fell 12.4 percent in July to the lowest level in nearly a half-century, the government reported Wednesday. And another report this week showed that sales of previously occupied homes fell to their lowest level in 15 years. Sales are plummeting after a popular homebuyer's tax credit expired April 30.