Jobless claims down 10,000

Decline shows fewer workers are being let go

By: JournalNow Staff | THE ASSOCIATED PRESS
Published: October 16, 2009

WASHINGTON

New jobless claims dropped to the lowest level since January and the prices of many household goods stayed low last month, positive signs of stability for the fledgling economic recovery.

The decline in jobless claims shows that companies are cutting fewer workers, though the drop isn't yet steep enough to signal new hiring, economists said. And the low level of inflation is holding down prices as Americans slowly regain their appetite to shop despite rising unemployment and tight credit conditions.

Yesterday's reports "all point to an economy that is starting to grow again," said Bernard Baumohl, the chief global economist at the Economic Outlook Group.

Low inflation is consistent with the early stages of an economic recovery, Baumohl said. Even as business activity picks up, unemployment is still high and factories have enough spare capacity to increase output without sending prices higher.

The Labor Department said that first-time claims for jobless benefits dropped to a seasonally-adjusted 514,000 from an upwardly revised 524,000 the previous week. The fifth decline in six weeks defied economists' forecasts of a slight gain.

The four-week average, which smooths fluctuations, fell for the sixth straight time to 531,500. That's the lowest since January and about 125,000 below the April peak.

Economists closely watch initial claims, which are considered a measure of layoffs and the willingness of companies to add jobs.