Published April 26. 2013 4:00AM
Washington - The number of people who applied last week for new unemployment benefits fell near a five-year low, though the decline probably reflected temporary distortions that often occur after the Easter holiday and not a marked improvement in the U.S. labor market.
Initial jobless claims dropped by 16,000 to a seasonally adjusted 339,000 in the week ended April 20, the Labor Department said Thursday. That's the second-lowest reading in 2013 and approached levels last seen in January 2008.
Economists surveyed by MarketWatch expected claims, a rough gauge of layoffs, to fall to 351,000 from a revised 355,000 in the prior week.
New claims surged in late March after Easter and spring break but have subsided in the past few weeks, suggesting the holiday briefly distorted the weekly report, as is often the case. By and large, the number of people applying for new benefits each week has been little changed in 2013, a sign that layoffs have bottomed out nearly four years after the recession ended.
"Firms cut their workforces to the bone during the recession and its aftermath, and layoffs are going to remain relatively low pretty much regardless of whether the economy picks up or slows down," said chief economist Stephen Stanley of Pierpont Securities.
Yet companies have also been very cautious about adding new employees, so employment still remains well below its pre-recession peak. Some 135.2 million Americans were working in March, down from 138 million six years ago, according to the Labor Department's business survey.
The U.S. has added about 190,000 jobs a month since the end of last fall-faster than the growth of the labor force but too slow to rapidly reduce the nation's unemployment rate.
Economists will watch claims closely in the next few weeks to see if they flatten out or resume a downward trend as the effects of the Easter holiday fade.
Meanwhile, the four-week average of new claims, which smooths out weekly volatility, fell by 4,500 to 357,500.