Unemployment claims drop

NEW YORK (CNNMoney.com) -- The number of Americans filing for initial unemployment insurance fell last week, the government said Thursday.

There were 469,000 initial jobless claims filed in the week ended Feb. 27, the lowest level since Jan. 9 and down 29,000 from a revised 498,000 the previous week, the Labor Department said in a weekly report.

A consensus estimate of economists surveyed by Briefing.com expected new claims to drop to 470,000.

The 4-week moving average of initial claims was 470,750, down 3,500 from the previous week's revised average of 474,250.

"It's a big drop, and we're moving in the right direction, but we're still not really at the level where I would hope we would be," said Tim Quinlan, economic analyst at Wells Fargo. "It seems like the gradual improvement we saw at the end of last year is leveling off at this point."

Continuing claims: The government said 4,500,000 people filed continuing claims in the week ended Feb. 20, the most recent data available. That's down 134,000 from the preceding week's revised 4,634,000 claims.

The 4-week moving average for ongoing claims fell by 29,250 to 4,575,750 from the previous week's revised 4,605,000.

But the drop may just mean that more filers are dropping off those rolls into extended 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 people who have moved to state or federal extensions, or people whose benefits have expired.

More than 200,000 people would have stopped receiving checks from the government this week after lawmakers let the Feb. 28 deadline to apply for extended benefits lapse. But after days of fighting, the Senate finally agreed Tuesday to push back the deadline until April 5, and President Obama signed the bill shortly after.

The extension came a day after Democratic senators unveiled a $150 billion bill that would push back the deadline to file for unemployment insurance until the end of the year and extend a number of expiring corporate and personal tax credits.

State-by-state: Unemployment claims in 12 states fell more than 1,000 for the week ended Feb. 20, the most recent data available. Claims in California dropped the most, by 12,000 due to a shorter workweek and fewer layoffs in the service industry.

A total of 7 states said the claims rose by more than 1,000. Claims in New Jersey jumped the most, by 4,879, which the state attributed to weather-related office closures and a backlog of claims due to a statewide furlough day during the prior week.

Outlook: Quinlan said that while the decline in claims last week is an improvement, the numbers have been inconsistent week to week, partly due to the weather.

"The numbers for the last several weeks have been really polluted by all the craziness we've been experiencing with the weather," he said. "We've had all these blizzards and it's really wreaking havoc on the data."

That's because, he said, so many people end up going to the claims office at the same time after the bad weather clears up, skewing the number of claims filed.

Weather factors aside, Quinlan said he doesn't think last week's jobless claims number is enough of an improvement.

"At the end of December we were averaging about 450,000 claims, so if we got down below that for March I would feel like that was an improvement," he said. "But the current levels aren't supportive of payroll growth, and they really need to be below 400,000 to see steady growth in payrolls."

In the coming months, Quinlan said he expects growth in the manufacturing sector and U.S. Census Bureau hiring to contribute to modest improvement in the employment landscape.

"The pace of decline that we saw in the second half of the year is leveling off, but I think we should start to see some gradual improvement and begin working our way back down to 400,000 in the next couple of months," he said.