New weekly jobless claims drops, but so does first-quarter GDP
New weekly jobless claims filed last week dropped by 14,000, in line with expectations, but first-quarter U.S. GDP was revised slightly downward, from a 3.2 percent to a 3 percent annual rate, the government said moments ago, in two data releases.
The Labor Department said that 460,000 new jobless claims were filed last week.
The four-week moving average of new unemployment claims, which smooths out volatility in the week-to-week numbers, actually rose slightly by 2,250, to 456,500.
In a piece of good unemployment news, the number of continuing claims dropped last week to 4.607 million from 4.656 million the previous week.
The bottom line on unemployment is this: The number of new weekly jobless claims remains stubbornly stuck at a rate that is just above where it needs to be for the economy to start adding new jobs at a consistent rate.
Economists say that the weekly jobless claims number needs to get down into the low 400,000s or, better, upper 300,000s and stay there for the economy to start adding meaningful new employment.
The official U.S. unemployment rate is 9.9 percent, up from 9.7 percent in March. The May number comes out next week, and it's expected to remain at about the same level, however forecasters are predicting that some 500,000 new jobs will have been added.
On GDP, the slightly downward revision was unexpected. Quarterly GDP gets multiple revisions as new data come in, and the revision went the opposite way that forecasters expected. Economists said that first-quarter GDP would actually be revised upward, from 3 percent to 3.5 percent.
Nevertheless, the U.S. economy is predicted to grow at a roughly 3 percent rate for the year, so small-scale revisions in GDP are in line with long-term expectations.
May 27, 2010; 8:26 AM ET
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