Weekly first-time jobless claims fall by 29,000

Claims for jobless benefits dropped last week from a three-month high, pointing to an improvement in the labor market that is slow to develop.

Initial jobless applications fell by 29,000 to 469,000 in the week ended Feb. 27, in line with the median forecast of economists surveyed by Bloomberg News, Labor Department figures showed Thursday in Washington. The number of people receiving unemployment insurance decreased to the lowest level in a year, while those receiving extended benefits climbed.

Some companies are still trimming payrolls to contain costs amid weak sales as the United States emerges from the worst economic crisis since the 1930s. An unemployment rate that's forecast to average 9.8 percent this year may restrain consumer spending, which accounts for about 70 percent of the economy.

"We are in this limbo state where it is not clear if job growth has started yet," Ethan Harris, head of economics for North America at Bank of America Merrill Lynch Global Research in New York, said in a Bloomberg Television interview. "Many companies say they overreacted and fired a lot of people, more than they needed to, with the news of the recession. So we're expecting broad-based rehiring." The four-week moving average of claims, a less volatile measure than the weekly figure, decreased to 470,750 last week from 474,250 the prior week.- Bloomberg News