Jobless claims suggest stumbling labor recovery

Thu Apr 26, 2012 12:16pm EDT
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By Jason Lange

WASHINGTON (Reuters) - The number of Americans lining up for new jobless benefits fell slightly last week but remained above levels posted earlier this year, suggesting improvement in the labor market is stalling.

Initial claims for state unemployment benefits dropped by 1,000 to 388,000, the Labor Department said on Thursday.

"This was a disappointing number and offers more evidence that the labor market continues to lose traction," said Joe Manimbo, an analyst at Western Union Business Solutions in Washington.

Economists polled by Reuters had expected new claims to fall to 375,000.

Still, a separate report offered fresh hopes of a pickup in the housing market, which has been a drag on wider economic growth since the 2007-2009 recession.

The National Association of Realtors said contracts to purchase previously owned U.S. homes rose 4.1 percent to a near two-year high in March.

U.S. stocks rose following the release of the home sales data, while concerns over the labor market pushed yields lower on U.S. government debt.

The report on jobless claims was the latest example of fizzling momentum in the labor market recovery.   Continued...

A day laborer sits in a truck behind a sign for an employment center in San Diego, January 6, 2011. REUTERS/Mike Blake