Jobless claims down for 3rd straight week

NEW YORK (CNNMoney.com) -- The number of Americans filing initial claims for unemployment insurance fell for the third straight week, according to weekly government data released Thursday.

There were 444,000 initial jobless claims filed in the week ended May 1, down 7,000 from a revised 451,000 the previous week, according to the Labor Department's weekly report.

Economists surveyed by Briefing.com had expected new claims to fall to 440,000 in the latest week. The number of new claims was the lowest since the 442,000 reported in the week ended March 27.

The Labor Department also tracks the four-week moving average of initial claims, which smoothes out volatility in the measure. That number was 458,500 for the week, down 4,750 from the previous week's revised average of 463,250.

"Things are lining up for recovery, but it's slower in its evolution than we expected," said Carl Riccadonna, U.S. economist for Deutsche Bank in New York.

A lack of economic confidence could be keeping hiring managers on the sidelines, according to Riccadonna. Jobless claims at or below 400,000 could help to boost morale.

"It's not helped when you look on TV and see developments in Europe and people worried about the impact of trans-Atlantic contagion," he said.

The number of people filing continuing claims totaled 4,594,000 in the week ended April 24, the most recent data available. That figure was down 59,000 from the preceding week's revised 4,653,000 claims, and slightly below the 4,600,000 economists expected, according to Briefing.com. Continuing claims were down for the fifth straight week.

The four-week moving average for continuing claims totaled 4,649,000, up 8,000 from the preceding week's revised average of 4,641,000.

Continuing claims data exclude people whose benefits expired or those who have moved to state or federal extensions. It reflects those filing each week after their initial claim until the end of their standard benefits, which usually last 26 weeks.

In April, lawmakers in the House and Senate approved an extension of unemployment insurance until June 2. The move followed a number of tax breaks andother measures designed to spur job growth and help push the current 9.7% unemployment rate lower.

Although many economists say the measures are slowly working, states are still feeling the pinch and jobless claims would have to fall further, faster, before the national unemployment rate ticks lower.

There has been increasing debate over whether the decline in continuing claims is due to real job creation or people exhausting their benefits. Riccadonna says there's no easy way to tell, but that "if the pace of job creation continues to accelerate, we can be increasingly confident that the drop in continuing claims is people finding jobs and not just rolling off the books."

Jobless claims fell the most in Florida, with a dip of 2,766 in the week ended April 24, primarily due to fewer layoffs in the construction, service, and manufacturing industries.

North Carolina and New York also saw dips in the 2,600 range. California, Massachusetts and Oregon topped the list of states with the largest increases in initial claims.

The report follows a spate of upbeat economic data in recent weeks. But that has been overshadowed by fears that Greece's debt crisis could spread throughout Europe.

Riccadonna said that he is not overly concerned about the impact on the United States in the short term, beyond some "exchange rate effect." However, a significant decline in the euro to $1.15 could hurt the competitiveness of U.S. exports, which he says has been a key driver in the recovery so far.

Three separate reports on Wednesday pointed to strong signs of jobs growth when the Bureau of Labor Statistics releases its official read of the unemployment situation on Friday. Economists surveyed by Briefing.com forecast that the U.S. added 187,000 jobs in April, compared to a gain of 162,000 in the prior month.

Still, total hiring would need to be 200,000 or more a month to push the rate down significantly, he said. Given recent economic data, he thinks the "big one" could come as early as May.

Although the nation is expected to have added jobs last month, many economists forecast the unemployment rate, also due Friday, to remain unchanged at 9.7%. Riccadonna is a bit more optimistic, forecasting a slight tick down to 9.6%.

"Really substantial gains in excess of 300,000 should be sufficiently jarring enough to wake up hiring managers and also the financial markets," said Riccadonna. "We're turning the corner. The question is how fast?"