MercoPress. South Atlantic News Agency

Hopeful news for US employment: jobless benefits applications down

President Barack Obama’s popularity has fallen as the jobless rate climbs

The number of US workers filing new applications for jobless benefits tumbled last week, a government report showed Thursday, reversing a recent spike that had raised concerns about renewed labour market weakness.

Initial claims for state unemployment benefits dropped by 43,000 to a seasonally adjusted 440,000 for the week ended February 6, down from a revised 483,000 in the prior week, the Labour Department said.

A US Labour Department official said that with this latest report, the administrative backlog was largely “washed out.” “By and large we are resuming a normal level with all states reporting an appropriate base level,” the official said.

Investors are keeping a close eye on jobless claims for evidence that the economy is on the verge of adding jobs again. With the exception of November 2009, payrolls have declined in every month since the recession began in December 2007.

That has piled political pressure on President Barack Obama, whose popularity fell as the jobless rate rose to a 26-year high.

In an economic report released earlier Thursday, the White House said it expects the economy to create an average of 95,000 jobs a month this year.

However, it said the unemployment rate would probably fall only slowly, and it was concerned about the large number of people out of work for a prolonged period.

The Labour Department's report showed the number of people applying for benefits after an initial week of aid fell to 4.54 million in the week ended January 30, the lowest in 13 months. However the figure can be tricky since many people have dropped off the rolls because they have exhausted benefits, not because they have found new jobs.