Jobless Claims Fall For Second Straight Week

Thursday, June 7th 2007, 8:37 am

By: News On 6

WASHINGTON (AP) _ Applications for unemployment benefits dipped for a second straight week, indicating the labor market remains healthy despite a yearlong slowdown in economic growth.

The Labor Department reported Thursday that the number of Americans filing claims for jobless benefits totaled 309,000 last week, down by 1,000 from the previous week. The small improvement pushed claims down to the lowest level in three weeks.

The drop was in line with analysts' expectations. Economists say that strength in the overall labor market has helped the economy withstand the blows from a serious slump in housing.

Overall economic growth slowed to a barely discernible 0.6 percent rate in the first three months of this year, the weakest showing in more than four years, as troubles in housing have deepened with growing problems with subprime mortgages, which were provided to borrowers with weak credit ratings.

However, analysts point to a number of better-than-expected statistics in recent weeks as an indication that the economy is staging a rebound. They are forecasting that overall economic growth will recover to a more respectable rate of 2.5 percent to 3 percent in the current April-June quarter.

In a speech this week, Federal Reserve Chairman Ben Bernanke voiced support for this assessment, saying while the housing slump is lasting longer than expected, there had not been any ``major spillovers'' to the rest of the economy.

Bernanke's comments, in which he repeated his belief that inflation remains a bigger threat to the economy than weak growth, represented a blow to Wall Street, dashing hopes that the Fed could cut rates anytime soon.

The four-week moving average for unemployment claims edged up slightly to 307,250, compared to 304,500 for the previous week.

For the week ending May 26, the number of Americans receiving unemployment benefits totaled 2.535 million, the highest level in four weeks.

There were 30 states and territories reporting increases in new benefit claims while 23 reported decreases in claims filings. The state data lags behind the national data by one week and is not adjusted for seasonal variations.

The states with the biggest claims increases were Texas, up 2,149, a rise attributed to higher layoffs in trade and service industries, and Michigan, up 1,888, an increase which reflected higher layoffs in the auto industry.

States with big declines in claims were North Carolina, down 3,477, reflecting fewer layoffs in transportation, furniture and other industries, and Missouri, down 2,072.