WASHINGTON – The number of Americans applying for unemployment benefits (search) dropped by 19,000 last week, the largest decline in two months, the government reported Thursday.
The Labor Department (search) said the decline pushed the level of unemployment benefits down to 334,000 after claims had unexpectedly jumped by 23,000 the week before.
The four-week moving average for claims, which smooths out week-to-week volatility, dipped slightly to 336,500 last week, a level that was viewed as pointing to further improvements in the labor market.
The big decrease of 19,000 was the first decline after two consecutive weekly increases and it was the largest drop since a decrease of 27,000 the week of Feb. 5.
Meanwhile, the nation's big retailers reported mixed sales in March as the benefits of an early Easter holiday were offset by unusually cold weather and soaring gasoline prices.
Several youth-oriented clothing stores including American Eagle Outfitters Inc. (AEOS) and Bebe Stores Inc. (BEBE) posted better-than-expected results but Wal-Mart Stores Inc. (WMT), the nation's largest retailer, and Limited Brands (LTD) reported that their March sales missed Wall Street's expectations.
Last week's improvement in jobless claims was very close to economists' expectations for a decline of 20,000 in claims applications. They had forecast an improvement believing that the large increase in the previous week was an aberration that reflected problems in adjusting for seasonal variations because Easter came early this year.
While the labor market has been improving in recent months following an extended period of weak job growth, the government reported last week that employers added just 110,000 people to payrolls in March, the poorest showing in eight months and only about half of what economists had been expecting.
The below-par jobs gain was blamed in part on rising energy costs that made businesses more cautious about hiring new workers.
However, analysts still remain confident that the economy will grow at a sufficiently robust pace this year to create more than 2 million jobs. In 2004, the economy created 2.17 million new jobs, a significant improvement after two years of job losses and only a small jobs gain in 2003.