New jobless claims continue to fall

The number of newly laid-off workers filing first-time claims for jobless benefits fell to the lowest level since early January, as layoffs eased a bit amid a fledgling economic recovery.

The fourth drop in new claims in five weeks is a sign the labor market is slowly healing, experts say. However, employers are reluctant to hire additional workers, and the unemployment rate is expected to keep climbing well into next year.

Separately, the Commerce Department reported that businesses reduced inventories at the wholesale level for a record 12th-straight month in August. But in an encouraging sign, sales jumped by the largest amount in 14 months.

Economists hope the rising sales will persuade businesses to begin restocking their depleted shelves, a switch that would boost factory production and help bolster broad economic growth in coming months.

The Labor Department said that new claims for unemployment insurance dropped last week to a seasonally adjusted 521,000, better than analysts expected and down from 554,000 the previous week.

The four-week average, which smooths fluctuations, fell to 539,750, the lowest since Jan. 17. The number of people continuing to claim benefits declined by 72,000 to 6.04 million. Analysts expected claims to rise slightly.

"The downtrend in claims is encouraging and points to continued, albeit gradual, improvement in the labor market," Joseph LaVorgna, chief U.S. economist at Deutsche Bank, wrote in a note to clients.

Economists closely watch initial claims, which are considered a gauge of layoffs and an indication of companies' willingness to hire new workers.

Despite the improvement, initial claims remain well above the 325,000 that economists say is consistent with a healthy economy.

The jobless-claims data indicate that layoffs are slowing. Employers eliminated a net total of 263,000 jobs in September, the Labor Department said last week. Many economists expect that number to decline this month.

When federal emergency programs are included, the total number of jobless-benefit recipients dropped by about 90,000 to 8.9 million in the week that ended Sept. 19, the latest data available. Congress has added up to 53 extra weeks of benefits on top of the 26 typically provided by the states, and is considering adding another 13 weeks.