Claims for unemployment benefits decline

WASHINGTON --- Fewer people are claiming jobless benefits, leading economists to project that next week's employment report will show a sharp drop in job losses for July compared with June.

 

Claims for jobless aid, which track layoffs and firings, are trending downward in a modest sign of improvement in the labor market, economists note.

That helps explain why analysts are forecasting that a net total of about 340,000 jobs will be lost in July. This would compare with a net total of 467,000 jobs lost in June and the 741,000 that were lost in January -- the most for any month since 1949.

The slowdown in job cuts is a positive sign for the labor market, though most economists still expect the unemployment rate to keep rising into next year.

The latest figures show "there has been some improvement in the job market this summer," David Resler, the chief economist at Nomura Securities, wrote in a research note.

Still, the overall economy continues to struggle.

Today the government will make its first estimate of the gross domestic product for the second quarter of this year. Many analysts predict the economy shrank at an annual rate of 1.5 percent from April through June, an improvement from the first quarter.

President Obama told reporters Thursday that though he expects the report to show the economy contracted last quarter, the United States has "stepped away from the precipice."

The number of newly laid-off workers filing first-time claims for jobless benefits rose last week, the Labor Department said Thursday, but the increase was mostly from seasonal distortions. Initial claims for unemployment aid rose by 25,000 to a seasonally adjusted 584,000, above analysts' estimates.

Still, that figure is below the 617,000 new claims filed in late June -- before the figures began to be distorted by a shift in the timing of temporary auto shutdowns.

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