Unemployment claims drop but job growth still slow

Applications for unemployment benefits fell by 10,000 last week suggesting businesses are still trimming staff despite an improving economy. 

Initial weekly jobless claims dropped to 453,000, 26 percent below last year's figures but still above what's considered a strong hiring trend, the Labor Department reported Thursday.

Last week's figure was revised up to 463,000. Economists estimate that to make a dent in unemployment, jobless claims need to run below 400,000. 

The four-week average of initial claims – a better gauge of unemployment trends – rose 1,750 to 459,000, the third straight increase. 

Monthly figures set for release Friday morning could show the economy added 515,000 jobs in May, although a significant number of those will probably come from temporary federal government hiring for the Census. Private sector payrolls are expected to show continued expansion.  

Job growth needs to average around 400,000 a month to chip away at the 9.9 percent unemployment rate. 

Continuing jobless claims for the week ended May 22, increasing 31,000 to 4.67 million, while the four-week average increased by 9,750 to 4.65 million.