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Unemployment claims fall

By Blake Ellis, staff reporter


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

There were 457,000 initial jobless claims filed in the week ended March 13, down 5,000 from a revised 462,000 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 455,000.

The 4-week moving average of initial claims was 471,250, down 4,250 from the previous week's unrevised average of 475,500.

"This is a step in the right direction," said John Canally, an investment strategist at LPL Financial. "The 471,250 number is roughly 200,000 below the peak of last March, so this suggests that layoffs are ceasing and now we're just waiting for companies to start to hire."

Canally said that while he was "a little disappointed that [jobless claims] didn't fall even further," it was encouraging to get a clean reading after bad weather and administrative issues had "plagued" the data over the past couple months.

Heavy snowstorms in the Northeast shut down government offices in February. As a result, the Labor Department had a backlog of claims that it wasn't able to process on time, which inflated the numbers in the following weeks. Economists said that the storms and cold weather also led to an increase in job losses within industries such as construction.

Continuing claims: The government said 4,579,000 people filed continuing claims in the week ended March 6, the most recent data available. That's up 12,000 from the preceding week's revised 4,567,000 claims.

The 4-week moving average for ongoing claims fell by 8,000 to 4,575,250 from the previous week's revised 4,583,250.

But the decline 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.

On Wednesday, the House passed a bill to extend the deadline to file for unemployment insurance by one month, through May 5.

However, the deadline to apply for extended benefits is set to expire in coming weeks. Last week, the Senate approved a bill that would push back the deadline until the end of the year, and the bill is now awaiting approval from the House.

State-by-state: Unemployment claims in four states dropped more than 1,000 for the week ended March 6, the most recent data available. Claims in New York fell the most, by 10,929, which the state said was due to fewer layoffs in the transportation and service industries.

A total of 5 states said that claims rose by more than 1,000. Claims in North Carolina jumped the most, by 5,100, which the state attributed to layoffs in the construction, service, industrial machinery, apparel and transportation equipment industries.

Outlook: Canally said he expects a steady drop in unemployment claims over the year as businesses increase their hiring.

"The layoffs have largely stopped," he said. "A year ago, companies were worried about having another Great Depression and thought they needed to cut their workforce and lay off employees, but now they're thinking the opposite, that they need to increase their market share and look to hire."

By the end of 2010, Canally said he predicts jobless claims to reach a healthier level of about 400,000. To top of page

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