By Vicki Needham - 06/16/11 01:52 PM EDT
Lately, job creation has been about taking the good with the bad, and last week was no different.
Initial unemployment claims dropped more than expected last week, but monthly figures reflected a stagnating job market struggling to fight its way back into healthy territory.
Unemployment benefit applications fell 16,000 to a seasonally adjusted 414,000, the second drop in three weeks from the prior week's revised 430,000 figures — a good signal that firings are slowing down, the Labor Department said Thursday.
First-time applications have remained frustratingly high, staying above 400,000 for the past 10 weeks, a level higher than what economists say reflects a healthy job market. Earlier this year, claims had dropped to 375,000, a level that suggests a faster pace of growth.
But those gains came skidding to a halt in April when applications hit their most recent peak at 478,000, gradually recovering from there.
The job market's pace of improvement has matched the economy's recent sluggishness, hampered by high gasoline and food prices and a housing market that is probably two years away from regaining solid footing.
During the past couple of months, companies likely curtailed an anticipated pick-up in hiring as prices rose through the spring.
The economy hasn't offered much in the way of positive trends lately, but earlier this week corporate executives said once again that they are preparing to ramp up hiring through the rest of 2011, according to a survey conducted by the Business Roundtable.
The survey, released Tuesday, found that 87 percent of the group’s CEOs expect higher sales over the next six months, and more than half plan to increase capital spending and U.S. hiring.
The survey showed slightly less confidence than three months ago, when 92 percent of those surveyed expected their sales to increase, but leaders of the group touted the survey as reflecting confidence the economy would move forward in the next six months.
“We continue to see an upward trend for the last six months of 2011,” said Ivan Seidenberg, chairman of the Business Roundtable and chairman and CEO of Verizon Communications.
Hiring is key to the economy's recovery, so more consumers have money in their pockets to fuel more spending, a component that represents 70 percent of the economy. In recent months, household budgets have been absorbed by those higher gas and food prices, leaving consumers with less money to spend on discretionary items.
Employers added only 54,000 net new jobs in May, much slower than the average gain of 220,000 per month in the previous three months, while the unemployment rate rose to 9.1 percent from 9 percent.
The number of people receiving unemployment benefits dropped 21,000 to 3.68 million, the lowest in two months.
For the week ending May 28, 7.4 million people received benefits, about 200,000 fewer than the previous week.
Those who’ve used up their 26 weeks of state benefits and are now collecting emergency and extended payments decreased by about 115,000 to 3.89 million in the week ending May 28.
Thirty-three states and territories reported a decrease in claims, while 20 reported an increase.
The largest increases in initial claims for the week ending June 4 were in Wisconsin (+1,528), Tennessee (+1,055), Illinois (+755), New Mexico (+659) and Indiana (+539), while the largest decreases were in New York (-4,060), California (-2,510), Massachusetts (-1,846), Georgia (-1,256) and Florida (-1,240).