Applications for jobless benefits decline

Applications for jobless benefits decreased 7,000 in the week ended Aug. 6 to 395,000, the fewest since early April, the Labor Department said Thursday.

Economists had forecast 405,000 claims, according to the median estimate in a Bloomberg News survey. The number of people on unemployment benefit rolls and those receiving extended payments also dropped.

Companies have slowed the pace of firings this year even as they have been reluctant to boost hiring, which continues to weigh on consumer spending. Weaker growth, last week's credit-rating downgrade and uncertainty over reducing deficit-spending may prompt businesses to further delay hiring plans, posing a threat to the recovery.

"We don't see any more deterioration in the labor market," said Eric Green, chief market economist at TD Securities Inc. in New York, who had forecast 390,000 claims. "I don't see any panic among businesses to shed workers, but you have some reluctance to hire workers."

Estimates for first-time claims ranged from 390,000 to 450,000 in the Bloomberg News survey of 48 economists. The Labor Department revised the prior week's figure to 402,000 from the initially reported 400,000.

The four-week moving average, a less-volatile measure of initial claims, dropped to 405,000, also the lowest since April, from 408,250.

-- Bloomberg News