Fewer workers file new unemployment claims

Jobless claims fell by 9,000 in the latest week, the Labor Department said.

• Hiring holds steady
• Half of 'rescued' borrowers still default
• Job outlook gets gloomier
• Where the jobs are
• Where the jobs are

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NEW YORK (CNNMoney.com) -- Initial claims for unemployment benefits fell last week, a Labor Department report issued Thursday showed.

The number of people filing for state jobless benefits decreased by 9,000 to 365,000 in the week ended May 17, the Labor Department said.

The consensus estimate of economists surveyed by Briefing.com was for a slight increase to 372,000.

"Today's report is consoling for now, but you have to be wary," said Robert Brusca, chief economist at Fact and Opinion Economics.

With crude oil prices racing up, dragging retail gas prices up as well, albeit at a much slower pace, the labor market is going to start to feel the pain, according to Brusca.

"With these surging oil prices, you have got to put a little bit of a red flag over the initial claims report and say, 'Hey! Things could get worse!'," Brusca said.

The four-week moving average of initial claims rose to 372,250, an increase of 5,000 from the previous week's revised average of 367,250.

New claims for the week ended May 10 were revised up to 374,000 from 371,000.

Jobless claims offer a nearly real-time reading on layoffs and the labor market. When claims rise above 400,000 and sustain that level, economists generally view that as a sign the economy has fallen into a recession. Claims in the 350,000 range, on the other hand, tend to indicate an economy in a slowdown.

This week's level of initial claims is "consistent with a very weak economy but not necessarily with a contracting economy," said Adam York, an economic analyst at Wachovia.

Unemployment insurance claims from workers already receiving benefits during the week ended May 10 remained unchanged from the previous week's revised level at 3.07 million.

The four-week moving average increased to 3.05 million from the preceding week's revised average of 3.02 million.

"Obviously the labor market is weaker than it was 6 months ago, but not as weak as in the wake of the last recession," said York.

The largest increases in initial claims for the week ended May 10 were in Michigan, North Carolina, Georgia, Mississippi, and Louisiana. The largest decreases occurred in New York, Kentucky, Wisconsin, Pennsylvania, and Oregon.

"The claims have been a source of solace for those worried about the economy; the fact that the job market did not deteriorate very much is a reason for optimism," said Brusca.

In states showing the highest jump in filings, the increase was due mostly to layoffs in the textile, food, service, agriculture, automobile and manufacturing industries.