New US Jobless Claims Fall to Four-month Low

Posted August 11th, 2011 at 11:15 am (UTC-5)
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First-time claims for jobless benefits in the United States have fallen to a four-month low, an indication companies are laying off fewer workers.

The U.S. government reported Thursday that 395,000 unemployed workers made their initial claim for financial assistance last week, a decline of 7,000 from the previous week. It was the fewest number of new applications since early April.

But analysts say the decline in the number of jobless benefit requests may not indicate that companies are hiring more workers. Instead, they say, it indicates firms are not firing as many employees.

The sluggish American economic recovery has been buffeted by a protracted fight over raising the government’s borrowing limit, an unprecedented downgrade last week of the country’s credit rating and then significant stock market losses this week. As a result, U.S. companies have been hesitant to hire more workers, even though they have reported that they have more than $1 trillion in cash on hand.

About 14 million Americans are out of work, and about 7.4 million of them are collecting government assistance while they look for new jobs. Economic experts say the weekly number of first-time jobless claims needs to fall to the 375,000 level for an extended period before there would be much of a reduction in the nation’s 9.1 percent unemployment rate.

In another U.S. economic indicator, a private firm, RealtyTrac, said that home foreclosure filings dropped 35 percent last month to the lowest level in almost four years. There were more than 212,000 foreclosure or default notices filed in July.

The firm said the lower number of foreclosures was the result of short-term interventions by government officials to try to keep people in their homes. But RealtyTrac said delays in processing other foreclosures could extend the woes for the U.S. housing market, possibly the weakest segment of the American economy.