By Jason Lange, Reuters
WASHINGTON–The number of Americans lining up for new jobless benefits fell last week for the first time since April, a hint that a slowdown in hiring last month may only be temporary.
Initial claims for state unemployment benefits dropped 12,000 to a seasonally adjusted 377,000, the Labor Department said on Thursday. That was spot on the median forecast in a Reuters poll. “The fact that the number didn’t back up is a strong sign that the economy is holding on,” said Carl Riccadonna, an economist at Deutsche Bank in New York. The data comes ahead of congressional testimony scheduled for later in the day by Federal Reserve Chairman Ben Bernanke, where he could give clues about the likelihood of further policy easing. Prior to last week, claims had risen in four consecutive weeks, adding to concerns over several months of lackluster hiring data. While the country emerged from a deep recession three years ago, the jobless rate was 8.2 percent in May, well above its long-term historical average. Still, most of the recent increases in new jobless claims were marginal and the overall level of claims has held at levels consistent with a modest recovery in the labor market. “I think the Fed looks at it and certainly leaves the door open for further action but it is not a ringing bell that it should take action right now,” said Peter Jankovskis, an investment officer at Oakbrook Investments in Lisle, Illinois.