Initial jobless claims dropped to 346,000 last week

WASHINGTON -- First-time jobless claims dropped to 346,000 last week, a positive sign ahead of Friday’s government unemployment report for May.

The Labor Department said Thursday the number of people filing for initial unemployment benefits in the week ending Saturday fell 11,000 from the previous week’s upwardly revised figure of 357,000.

The new snapshot on the labor market was in line with analyst expectations and indicated the labor market continues to grow at a moderate pace.

The figures provided a counterbalance to some negative private economic data this week indicating large automatic federal spending cuts had started to hinder growth significantly.

Among those was ADP’s report that the private sector added a disappointing 135,000 jobs in May, indicating labor market growth has slowed in recent months.

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The weekly jobless claim figures can be volatile. The number unexpectedly jumped in the week ending May 25 partly because of an increase of 8,622 service industry layoffs in California, according to the Labor Department.

The more stable four-week average rose 4,500 last week to 352,5000. That puts jobless claims over the last month at about the level that economists say is consistent with moderate labor market growth.

Analysts expect the Labor Department to report Friday that the economy added about 165,000 net new jobs in May, the same as the previous month. The unemployment rate is expected to hold steady at 7.5%.

Such a level of labor market growth would be slower than the pace from November through February, when the economy added an average of about 236,000 net new jobs a month.

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