WASHINGTON (MarketWatch) -- U.S. initial jobless claims fell to their lowest level since April in the latest week, but continuing unemployment claims reached a level not seen since December 2003, the Labor Department said Thursday.
Initial claims fell by 58,000 to 346,000 for the week ended July 5, their lowest mark since April 19 and the largest one-week decline in more than two years.
The prior week's claims were unrevised at 404,000, only the second time in the current cycle when claims had risen above the 400,000 mark.
"We expect that initial claims will move back towards the 400,000 level in the coming weeks and we do not view today's report as evidence of an improvement in labor market trends," wrote John Ryding and Conrad DeQuadros of RDQ Economics.
"This is one of those times we have to say 'wait 'til next week,'" wrote Robert Brusca, chief economist for FAO Economics. "Claims often are skewed lower in holiday weeks."
The first two weeks of July usually show large increases as automobile and other manufacturers temporarily lay workers off to retool production, a Labor Department spokesman said.
The four-week average of initial claims was 379,250, a decrease of 10,000 from the previous week. The four-week average smoothes out distortions caused by events such as holidays, weather and strikes.
More ominous, the latest continuing claims numbers suggest that jobs are increasingly difficult to find.
For the week ended June 28, continuing claims rose by 91,000 to reach 3.2 million. It was the highest since Dec. 27, 2003.
The four-week average of continuing claims also rose, up 16,500 to 3.13 million, the highest since Feb. 21, 2004.
"Businesses remain cautious considering the uncertain outlook and notable downside risks," wrote Andrew Gledhill, an economist for Moody's Economy.com. "Unemployed workers are likely to stay unemployed for longer stretches of time."
Benefits are generally available for those who lose their full-time job through no fault of their own. Those who exhaust their unemployment benefits are still counted as unemployed if they are actively looking for work.
The insured unemployment rate rose to 2.4% from 2.3%.Blogged with the Flock Browser
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