Conference attendees cross a street in San Francisco, Calif. Jobless claims took their biggest drop in a year, easing fears about a stumbling job market.
New claims for unemployment benefits tumbled more than expected in the latest week, raising hopes that the job market remains on the mend.
The Labor Department said Thursday that seasonally-adjusted claims fell 27,000 to 365,000 in the week ended April 28. It was the largest weekly drop in claims since May of 2011. Claims also were at their lowest since the March 31 week and were well below the 380,000 expected by economists.
The four-week moving average gained 750 to 383,500.
The prior week's figure was revised up to 392,000 from the previously reported 388,000.
The data has no bearing on the government's closely watched employment report for April, to be released on Friday. Employers are expected to have added 170,000 new jobs to their payrolls last month, a step up from March's 120,000 tally, according to a Reuters survey.
However, there is a downside risk to this forecast as initial claims were elevated for much of April. An independent survey on Wednesday showed private employers added only 119,000 jobs last month, the fewest in seven months, and well below economists' expectations for a gain of 177,000 positions.
"This offsets the concerns from yesterday's ADP number. You're getting mixed signals...It might not be as bad as we were thinking after ADP," said Phil Flynn, a senior market analyst at PFG Best in Chicago.
Nonfarm payrolls had averaged 246,000 jobs per month between December and February. Most economists have viewed the pull-back in job growth as payback after the weather-induced gains in the previous months.
Federal Reserve Chairman Ben Bernanke said last week an unseasonably warm winter had probably brought forward some of the hiring by companies, likely artificially boosting payrolls in January and February.
Meanwhile, U.S. nonfarm productivity fell in the first quarter as companies hired more workers to maintain output, but a moderate rise in wages suggested little pressure on company profits and inflation.
Productivity slipped at a 0.5 percent annual rate, the Labor Department said, after rising at an upwardly revised 1.2 percent rate in the last three months of 2011.
The decline in productivity, which measures hourly output per worker, was in line with expectations. Fourth-quarter productivity had been previously reported to have increased at a 0.9 percent rate.
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