Unemployment rolls take largest drop in 7 years

First-time jobless claims are a measure of the pace of layoffs and are seen as a timely, if volatile, indicator of the economy's health. Initial claims stood at 390,000 a year ago.

Consumers and businesses have cut spending in response to the burst housing bubble and the financial crisis, sending the economy into the longest recession since World War II. Companies have cut a net 6 million jobs since the downturn began in December 2007, in an effort to reduce costs.

Still, job cuts are slowing. The Labor Department says employers eliminated 345,000 positions in May, about half the monthly average of jobs lost in the first quarter.

More job cuts have been announced in the past week. MySpace, the social networking website owned by News Corp., said Tuesday that it will cut nearly 30% of its work force, or about 420 jobs.

And Cessna Aircraft, the nation's largest builder of corporate jets, said Friday that it will cut 1,300 jobs by August, on top of 6,900 layoffs it previously announced.

Among the states, Pennsylvania reported the largest increase in initial claims for the week ended June 6. It attributed the increase of 6,861 claims to layoffs in construction, service and transportation. The next largest increases were in Florida, Ohio, California and New York.

Arkansas had the largest decrease of 1,206, which it attributed to fewer layoffs in the auto industry. The next largest drops were in Puerto Rico, Wisconsin, Arizona and Nebraska.

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