US Jobless Claims Fell Last Week, But Again Miss Forecast

More Americans than expected filed for jobless benefits last week, adding to a recent batch of soft economic data, stoking fresh concerns about the recovery's strength.

In the week ended April 21, applications for unemployment insurance payments decreased by 1,000 from the previous week's upwardly revised figure of 389,000, to 388,000, according to data from the Labor Department that was issued on Thursday in Washington. The level of claims was above market expectations for a 375,000 reading.

The four-week moving average, which normally provides a better indication of the underlying trend in labor markets than the weekly number of jobless claims, was 381,750, an increase of 6,250 from the previous week's upwardly revised average of 375,500 for first-time benefit applicants.

Tweaks to Wednesday's Federal Open Market Committee statement suggested the recovery may still falter.

The Committee expects economic growth to remain moderate over coming quarters and then to pick up gradually, the April FOMC statement said. In March, Fed officials said they expected moderate economic growth.

In describing the job market, Fed officials said the unemployment rate has declined but remains elevated, while last month, they said the jobless rate had declined notably in recent months but remains elevated.

Payroll growth slowed in March to 120,000 jobs, the smallest gain in five months, while the unemployment rate fell to 8.2 percent, from 8.3 percent, largely due to a lower labor market participation rate.

Fed Chairman Ben Bernanke explained during his post-meeting press conference Wednesday that warm weather made perhaps January and February artificially strong and March perhaps artificially a little bit weak.

Bernanke left open the possibility of further easing. We remain prepared to do more as needed to make sure that this recovery continues and that inflation stays close to target, he said at a press conference Wednesday following the FOMC meeting.

Fed officials reduced their forecast for unemployment after payroll gains averaged more than 200,000 a month during the first quarter, while affirming a plan to keep the benchmark lending rate around zero, at least through late 2014.

Policy makers forecast the unemployment rate would average 7.8 percent to 8 percent in the final three months of this year, compared with a forecast of 8.2 percent to 8.5 percent in January. However, the new forecasts are still far above officials' estimates for full employment, which range from 4.9 percent to 6 percent.

Job gains are of great importance because they lead to income growth and that supports consumer spending, which accounts for more than 70 percent of the U.S. economy.

Continuing Claims

The number of people filing for benefits after an initial week of aid increased by 3,000, to 3.32 million in the week ended April 14.

The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.

The four-week moving average for the week ended April 14 fell by 9,750, to 3.31 million, from the preceding week's revised average of 3.32 million.

Stock futures fell. The S&P 500 futures retreated 4.40 points, to 1,382.80, while the Dow Jones Industrial Average futures fell 29 points, to 13,011.