Initial and continuing jobless claims fall

The tally of newly laid-off workers filing for unemployment insurance dropped last week, the government said Thursday, a sign job cuts are easing.

The Labor Department said initial jobless benefit claims fell by 16,000 to a seasonally adjusted 614,000. That nearly matches analysts' estimates, according to Thomson Reuters.

Jobless claims are slowly declining from a peak reached in early April. The four-week average of claims, which smooths out fluctuations, dropped to 615,250, the lowest in almost four months.

Economists are closely watching the level of first-time claims for signs the economy will recover by the July-September quarter, as many predict.

In a separate report, the department said employers cut a net total of 467,000 jobs in June, more than analysts expected. The unemployment rate rose only slightly to 9.5 percent, its smallest increase in six months.

Consumers and businesses have sharply cut back spending in response to the bursting of the housing bubble and the financial crisis, sending the economy into the longest recession since World War II.

Companies have cut a net total of 6.5 million jobs since the downturn began in an effort to reduce costs.

Meanwhile, the total jobless benefit rolls fell for the second time in three weeks. The number of continuing claims for unemployment insurance dropped by 53,000 to 6.7 million, defying analysts' expectations of a small rise. The continuing claims figure lags initial claims by a week.

Millions of Americans continue to receive benefits under an emergency federal program enacted by Congress last year. The federal program adds 20 to 33 weeks of benefits on top of the 26 weeks typically provided by states.

More than 2.4 million people received unemployment insurance under the federal program in the week ending June 13, the most recent data available. Another 282,000 are claiming benefits under a state-run extended benefits program, which adds up to 13 additional weeks. All told, about 8.8 million people received jobless benefits that week.

Despite the improvement, initial claims remain far above levels associated with a healthy economy. A year ago, claims stood at 405,000.

Some companies are still shedding jobs. Newspaper publisher Gannett Co. on Wednesday said it plans to cut 1,400 jobs in the next few weeks, about 3 percent of the work force, as it faces a prolonged slump in advertising revenue.

Farm machinery company Deere & Co. earlier this week said 800 salaried employees, or 3 percent of its salaried work force, took a voluntary buyout offer. Cessna Aircraft Co., which makes corporate jets, has said it would cut 1,300 jobs by this summer on top of 6,900 earlier layoffs.

Among the states, California reported the largest increase in initial claims, with 14,570, which it attributed to higher layoffs in the service industry. The next largest increases were reported by New Jersey, Oregon, Maryland, and Michigan. The state data lags initial claims by one week.

Missouri reported the largest decrease, with 5,753, which it attributed to fewer layoffs in the construction, transportation and warehousing industries. Pennsylvania, Texas, Alabama, and Florida reported the next largest drops.