WASHINGTON – The number of people filing new claims for unemployment benefits fell sharply last week, offering hope that companies may be feeling better about business conditions and less inclined to hand out pink slips.
The Labor Department (search) reported Thursday that for the work week ending Feb. 14, new applications filed for jobless benefits plunged by a seasonally adjusted 24,000 to 344,000. It marked the largest decline since the beginning of November and left claims at their lowest level since the week ending Jan. 24.
That was better than economists were expecting. They were forecasting claims to decrease to a level of around 351,000 for last week. Part of last week's decline reflected fewer layoffs in weather-sensitive businesses in some parts of the country that had been previously hard hit by winter's harsh weather, a Labor Department analyst said.
After hitting a high last year of 459,000 in the middle of April, the number of new jobless claims since then has been drifting downward.
But even as companies have reduce the speed at which they lay off workers, they haven't been in a rush to hire people back. Job growth has been painfully slow — a sore spot for President Bush.
Thursday's report also showed that the number of unemployed people collecting jobless benefits for more than a week rose by 106,000 to 3.2 million for the week ending Feb. 7, the most recent period for which that information is available. This suggests that jobs are still hard to find for some workers.
The report comes as recent Bush administration comments about the job climate touched a political nerve and raise questions about the White House's economic grasp.
President Bush on Wednesday distanced himself from an earlier prediction by his economic advisors that that the economy would add 2.6 million new jobs this year.
Before that flap, N. Gregory Mankiw, chairman of the president's Council of Economic Advisers (search), asserted that "outsourcing" American jobs overseas was good for the U.S. economy in the long run. While that comment is consistent with conventional economic thought, it was seen as insensitive to the millions of Americans who can't find a job. Mankiw later apologized and said he had been misunderstood.
The economy has lost 2.2 million jobs since Bush took office in January 2001. Democrats wanting to win back the White House have sought to highlight the slow job growth under Bush's watch.
Federal Reserve (search) Chairman Alan Greenspan told Congress last week that he is hopeful that companies will step up hiring in the months ahead. Companies may be running out of ways to squeeze ever-more efficiencies out of existing workers and may need to add new ones to meet growing demand, some economists say.