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Jobless claims decline

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The Associated Press

Published: July 17, 2009

WASHINGTON - The number of newly laid-off Americans signing up for unemployment benefits last week and those using this safety net over a longer period both plunged. The government figures released Thursday were clouded by difficulties adjusting for temporary shutdowns at auto plants.

Even if the recession ends this year as the Federal Reserve and many private economists expect, companies are expected to keep trimming payrolls. The unemployment rate will climb because companies won't be in any mood to hire until they feel certain a recovery is firmly rooted.

The Labor Department said new applications for unemployment insurance fell by a seasonally adjusted 47,000 to 522,000, the lowest level since early January.

Economists polled by Thomson Reuters expected claims to rise to about 575,000.

A department analyst said the decrease in new claims didn't point to improvements in economic conditions. The second straight weekly decline reflected problems adjusting layoffs for temporary shutdowns at General Motors and Chrysler plants to retool for new models.

Weekly claims remain far higher than the roughly 325,000 that analysts say is consistent with a healthy economy. New claims last fell below 300,000 in 2007.

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