WASHINGTON, Oct 9 - The number of Americans filing an initial claim for jobless aid fell last week to its lowest level in eight months, the government said on Thursday in a report that offered a hopeful sign layoffs were easing. First-time filings for state unemployment aid fell 23,000 to 382,000 in the week ending Oct. 4 from an upwardly revised 405,000 in the previous week, the Labor Department said. The drop brought initial claims to their lowest since early February and suggested a bit more of an improvement in the labor market than had been expected by Wall Street economists, who had been looking for a level of 393,000. Last week's drop in claims also brought a closely watched four-week moving average of initial filings, which smooths weekly volatility to give a better reading of trends, to its lowest level since early February. The department said the average fell 11,500 to 393,500 last week, marking its first drop below the key 400,000 level in six weeks. Economists say claims above 400,000 suggest a deteriorating jobs market, while claims below that signal improvement. "We're still not at a level where people are thinking that the labor situation has improved, but we're getting close," said Gary Thayer, chief economist at A.G. Edwards & Sons in St. Louis.
Prices for U.S. Treasury securities fell on the report, pushing yields higher, while the dollar gained a bit in value against other major currencies. "The bond market is off a little bit because the stronger the labor market looks, the less time people are likely to think that the (Federal Reserve) will wait before raising (interest) rates," Thayer said. The Fed has moved overnight borrowing costs down to a 45-year low of 1 percent and said they could likely stay there for a "considerable period." While the report suggested layoffs were slowing, it also showed unemployed workers were still having a tough time finding new jobs. For the week ended Sept. 27, the number of Americans staying on the benefit rolls after filing an initial claim fell by a slim 7,000 to a still-lofty 3.64 million.
JOBS?
Although the economy emerged from recession in November 2001, it has lost over a million jobs since then. However, in September the recovery managed to eke out 57,000 new jobs. Economists said the increase in September payrolls offered hope that an unusually protracted period of falling employment may be drawing to a close. A jobs recovery is essential to ensure the sustainability of the expansion, analysts and Fed officials say. In a separate report, the department said prices of goods imported into the United States last month fell 0.5 percent on the back of a big drop in oil costs. Stripping out a 5.2 percent slide in petroleum prices, U.S. import prices would have risen 0.2 percent. Over the 12 months through September, prices of non-petroleum imports have risen 0.9 percent, compared to a 0.9 percent drop in the corresponding period a year ago. Economists have said this turnaround reflects a decrease in the value of the U.S. dollar. A long downward trend in the greenback's value against other major currencies has accelerated in recent weeks, which could put further upward pressure on import prices. On Tuesday, Kansas City Federal Reserve Bank President Thomas Hoenig said any upward price pressure from the dollar's decline should be offset by productivity gains that help U.S. businesses hold their production costs down, keeping U.S. inflation in check.//