Jobless claims fall for first time since April

Thu Jun 7, 2012 5:00pm EDT
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By Jason Lange

WASHINGTON (Reuters) - The number of Americans lining up for new jobless benefits fell last week for the first time since April, a hint that a slowdown in hiring last month may only be temporary.

The data on state unemployment claims, released by the Labor Department on Thursday, takes some of the edge off a report by the government last week that showed job creation slowed sharply in May.

Many economists believe mild weather in the winter led employers to hire more workers then at the expense of spring, but the weather effect should be temporary. Some economists suggested the claims data backed that view.

It "gives us more confidence that the trend in payrolls is stronger than the May payroll data implied," UBS said in a note to clients.

Four consecutive months of slowing job creation had fueled speculation the Federal Reserve would ramp up efforts to prop up the U.S. economy.

However, in congressional testimony on Thursday, Fed Chairman Ben Bernanke offered few hints that further monetary stimulus was imminent, even though he said the U.S. central bank was ready to shield the economy if financial troubles mount.

The Labor Department said initial claims for state unemployment benefits dropped by 12,000 to a seasonally adjusted 377,000 last week. That was spot on the median forecast in a Reuters poll.

"If the economy were really swooning because of events in Europe, it should be accompanied by a backup in jobless claims," said Carl Riccadonna, an economist at Deutsche Bank in New York.   Continued...

Job seekers speak to recruiters at a job fair sponsored by the New York Department of Labor in New York, June 7, 2012. REUTERS/Keith Bedford