Initial jobless claims drop; durable goods orders surge

WASHINGTON -- The tally of newly laid-off people seeking jobless benefits fell last week, a sign that companies are cutting fewer workers, and demand for big-ticket manufactured goods soared by the largest amount in 16 months in April, the second increase in the past three months.

But the number of workers continuing to receive unemployment benefits rose to 6.78 million — the largest total on records dating back to 1967 and the 17th straight record week. The figures for continuing claims lag behind initial claims by one week.

The Labor Department said the number of initial claims for unemployment insurance dropped to a seasonally adjusted 623,000, from a revised figure of 636,000 in the previous week. It was below analysts' estimates of 635,000.

The four-week average of initial jobless claims, which smooths out fluctuations, dropped slightly to 626,750. That figure is about 30,000 below the peak for the recession reached in early April. Some economists say the drop is a sign the recession is bottoming out. Jobless claims reflect the number of job cuts by companies.

Still, claims remain far above levels in a healthier economy. Weekly initial claims were 378,000 a year ago.

And the relentless rise in continuing claims for jobless benefit means the unemployment rate, which reached 8.9% in April, will rise in May, economists said. Many economists expect the rate to approach 10% by the end of this year.

Even if layoffs are slowing, jobs remain scarce. A net total of more than 5.7 million jobs have been lost since the recession — the longest since World War II— began in December 2007.

Separately, the Commerce Department reported Thursday that orders for durable goods rose 1.9% in April, more than four times the 0.4% increase that had been expected. But the government revised down its estimate for new orders in March to show a drop of 2.1%, a much bigger fall than the 0.8% decline previously reported.

Still, new orders have risen in two of the past three months after having recorded six straight declines. Analysts believe this could be signaling that the deep recession in manufacturing may be bottoming out. But they believe a sustained rebound is still some distance away.