NEW YORK (CNN/Money) - New weekly claims for jobless benefits in the United States dropped last week, the government said Thursday, but stayed above a benchmark level indicating the labor market continued to suffer in a sluggish economy.
The Labor Department said the number of Americans filing new claims for unemployment benefits fell to 402,000 in the week ended March 22 from a revised 427,000 the prior week. Economists, on average, expected 419,000 new claims, according to a Reuters poll.
Any number above 400,000 generally is considered to indicate a deteriorating labor market.
U.S. stock market futures had little reaction to the report, trading lower and pointing to a negative opening on Wall Street. Treasury bond prices rose.
Earlier this month, the Labor Department said non-farm employers cut 308,000 jobs from their payrolls in February as the unemployment rate rose to 5.8 percent.
Private non-farm payrolls are 2.5 million jobs lower than they were in March 2001, when economists at the National Bureau of Economic Research say a recession began. After a brief recovery in mid-2002, the labor market has worsened in recent months.
Most of the trouble, many economists believe, has been concern about the economic impact of the United States going to war with Iraq. According to this view, businesses will make long-term spending and hiring plans once the war is over.
Other economists, however, worry that businesses will not start hiring again until they see demand pick up significantly. Since there's little pent-up demand on the part of consumers, whose spending makes up more than two-thirds of the economy, it seems possible that the full economic recovery could take longer than most economists think.
In any event, most economists think it will be months before the labor market begins growing significantly.
In the Labor Department's report Thursday, the four-week moving average of weekly jobless claims, which irons out the ups and downs of the volatile weekly data, dipped to 422,500 from a revised 426,500 the prior week.
Continued claims, the number of people out of work for a week or more, dipped to 3.52 million in the week ended March 15, the latest data available, from a revised 3.53 million the prior week.