Jobless claims fall more than expected
Initial filings for unemployment insurance slip by 26,000 to 550,000. Continuing claims also drop.
NEW YORK (CNNMoney.com) -- The number of Americans filing for initial unemployment insurance fell last week, and ongoing claims also dropped, the government said Thursday.
There were 550,000 initial jobless claims filed in the week ended Sept. 5, down 26,000 from a revised 576,000 the previous week, the Labor Department said in a weekly report.
A consensus estimate of economists surveyed by Briefing.com expected 560,000 new claims.
The 4-week moving average of initial claims was 570,000 down 2,750 from the previous week's revised average of 572,750.
"We're still talking about declining at a slower pace, not outright job growth," said Tim Quinlan, analyst at Wells Fargo, who noted initial claims were at their lowest level since July.
Quinlan added that claims levels are well off the highs seen earlier this year amid mass layoffs, but they remain "roughly double what they would be in an expansionary economic environment."
Continuing claims: The government said 6,088,000 people filed continuing claims in the week ended Aug. 29, the most recent data available. That's down 159,000 from the preceding week's revised 6,247,000 claims.
The 4-week moving average for ongoing claims fell by 37,750 to 6,182,500, down from the prior week's revised average of 6,220,250.
The initial claims number identifies those filing for their first week of unemployment benefits. Continuing claims reflect people filing each week after their initial claim until the end of their standard benefits, which usually last 26 weeks.
The figures do not include those who have moved to state or federal extensions, nor people whose benefits have expired.
State-by-state data: A total of six states reported a decline in initial claims of more than 1,000 for the week ended Aug. 29, the most recent data available. Claims in Michigan fell the most, by 1,915.
Conversely, five states said that claims increased by more than 1,000. New York reported the most new claims at 4,546, which a state-supplied comment said was due to more layoffs in the transportation and service sectors.
Outlook: "In the short term, [claims] may give up some ground, but we probably have turned a corner," Quinlan said.
Wells Fargo estimates the recession ended in July, he said, but the labor market will likely not recover until the second quarter of 2010. Even when some signs of recovery are evident, "it will take a ton" to improve the unemployment rate, he added.
"It doesn't mean the economy overall is [still] in greater trouble, but it lags overall recovery," Quinlan said.
Initial claims will probably fall within a range of 500,000 and 600,000 through the end of 2009, Quinlan said.
"[Filings] could even fall below the 500,000 mark," Quinlan said. "That's optimistic, but it's possible." 
