Jobless claims fall for 1st time in 3 weeks

NEW YORK (CNNMoney.com) -- The number of Americans filing initial claims for unemployment insurance fell for the first time in 3 weeks, according to government data released Thursday.

There were 456,000 initial jobless claims filed in the week ended April 17, down 24,000 from a revised 480,000 the previous week, according to the Labor Department's weekly report.

Economists surveyed by Briefing.com had expected new claims to fall to 450,000 in the latest week. The number of new claims was the lowest since the 442,000 reported in the week ended March 27.

The Department of Labor said the four-week moving average of initial claims, which smoothes out volatility in the measure, rose 2,750 to 460,250.

The department and economists had attributed increases in prior weeks to volatility related to the Easter holiday and other so-called "administrative" factors.

"It was a relief to see a nice decline in claims," said Robert Dye, senior economist for PNC Financial Services. "With that said, when you look at the trend, we've seen steady improvement through the last half of 2009."

The number of people filing continuing claims totaled 4,646,000 in the week ended April 10, the most recent data available. That figure was down 40,000 from the preceding week's revised 4,686,000 claims, and slightly above the 4.6 million economists expected, according to Briefing.com. Continuing claims were down for the third straight week.

The four-week moving average for continuing claims totaled 4,643,750, down 5,500 from the preceding week's revised average of 4,649,250.

Although the number of jobless claims is declining, Dye called the trend in 2010 "modest at best" and said that there continues to be a disconnect between rising initial claims and upbeat employment surveys.

Lawmakers in the House and Senate on April 15 approved an extension of unemployment insurance until June 2. In March, the government instituted a number of tax breaks for businesses and other measures to spark job growth and bring down the national unemployment rate, which sits at 9.7%.

Dye expects the government's "necessary" measures to result in a slight drop in the unemployment rate to 9.6%, when the number is announced on May 7.

"That's as optimistic as we can get at this point, given the shallow improvement in initial jobless claims so far this year," he said.

Jobless claims fell the most in Kentucky, with a decrease of 2,147. Iowa and New Jersey rounded out the top three states with the largest dip in new claims in the week ended April 10, the most recent data available.

Conversely, New York and California, which saw nearly 24,000 new claims each, and Florida were the top three states with the largest increases in initial claims.

The report comes on the heels of a spate of upbeat economic data, including last week's strong retail sales and this week's flood of better-than-expected corporate earnings. Earlier in April the government reported that the U.S. economy added 162,000 jobs in March.

Although Dye forecasts gradual improvement in the jobs market, he warned that the still-high continuing claims number could be problematic, since the measure also includes people who have exhausted their benefits. This, he says, could weigh on the economy for years to come.

"We have to be concerned that people running out of benefits represents ongoing stress on households and a drag on consumer spending going forward," he said.