NEW YORK (CNN/Money) - New jobless claims in the United States fell last week, the government said Thursday, but remained high, continuing to reflect a labor market struggling to recover.
The Labor Department said the number of Americans filing new claims for unemployment benefits fell to 424,000 in the week ended May 24 from a revised 433,000 the prior week. Economists, on average, expected 419,000 new claims, according to a Reuters poll.
Separately, the Commerce Department revised its estimate of first-quarter growth in gross domestic product (GDP), the broadest measure of the economy, to 1.9 percent from its initial estimate of 1.6 percent. The revision matched the forecasts of economists surveyed by Reuters.
U.S. stock futures continued to trade higher after the report, pointing to a positive opening on Wall Street. Treasury bond prices also rose.
Many economists believe the 400,000 level of claims is a benchmark for labor-market weakness; others think that number should be higher. Regardless, few economists would argue that the labor market is particularly strong at the moment.
The U.S. unemployment rate is at 6.0 percent, matching the highest level since 1994, non-farm employers have cut 525,000 jobs from payrolls in the past three months, and payrolls still are 2.1 million jobs thinner than they were in March 2001, when economists at the National Bureau of Economic Research say a recession began.
After a modest recovery in early 2002, the labor market weakened again, and most economists said for months that the economy's biggest problem was the U.S.-led war with Iraq. According to their view, businesses would make long-term spending and hiring plans when the war was over.
However, the war has been over for weeks and jobless claims have been consistently high, drawing the attention of Federal Reserve Chairman Alan Greenspan, who warned recently they were a sign of business caution that could slow down an economic recovery.
Some economists worry 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 likely that it will take 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, fell to 427,000 from a revised 434,250 the prior week.
Continued claims, the number of people out of work for a week or more, rose to 3.76 million in the week ended May 17, the latest data available, from a revised 3.68 million the prior week.