WASHINGTON - The number of newly laid-off workers seeking unemployment benefits fell more than expected last week to the lowest total in a month, a sign the job market may be improving.
The Labor Department said first-time claims for unemployment insurance dropped by 43,000 to a seasonally adjusted 440,000. Wall Street economists expected a smaller decline of 15,000, according to a survey by Thomson Reuters.
The jobless claims report was the first of the year that wasn't affected by a holiday backlog. The easing of the backlog had elevated the numbers for the previous three weeks. The latest figures likely provide a clearer picture of the job market.
And they raise some hopes for the economic rebound. "The recovery is slowly taking root," Diane Swonk, chief economist at Mesirow Financial, wrote in a research note. Still, she added, "Any gains we see are likely to remain muted given the depth of the losses we endured, especially when it comes to jobs."
The unemployment claims numbers for this week that will be reported next week will likely be affected by the closing of businesses and government offices due to snowstorms in the Mid-Atlantic and Northeast regions.
The snowstorms could cost the economy more than 100,000 jobs in February, according to Carl Riccadonna, senior U.S. economist at Deutsche Bank. Construction companies and retailers may hire fewer people. And government hiring for the 2010 Census could also be delayed, he said.
The four-week average of jobless claims fell by 1,000 to 468,500. It was the first drop after three weeks of increases. Many economists say the four-week average would need to fall consistently below 425,000 to signal that the economy will start generating net job gains.
The Obama administration estimated Thursday that the economy will generate an average of 95,000 jobs a month this year. That wouldn't be enough to drive down the jobless rate, which the administration predicts will stay near 10 percent through year's end. The number of people claiming benefits for more than a week, meanwhile, fell by nearly 80,000 to 4.5 million. That was a steeper decline than expected.
Meanwhile, Senate Democrats yesterday proposed a new, stripped-down version of their jobs bill in hopes of getting it through Congress quickly.
Senate Majority Leader Harry Reid's latest bill is focused on several popular provisions aimed at boosting job creation, including tax breaks for companies that hire unemployed workers and for small businesses purchasing equipment. It also would renew highway programs and help states and local governments finance large infrastructure projects. Reid, a Nevada Democrat, unveiled the pared-back plan after having difficulty uniting his Democratic colleagues behind a broader bill stuffed with unrelated provisions sought by lobbyists for business groups and doctors.