Jobless claims drop as labor market shows signs of life

Applications for first-time jobless benefits dropped more than expected last week, another sign of the labor market’s recovery.

Weekly unemployment insurance applications fell 27,000 to a seasonally adjusted 300,000, the Labor Department said Thursday.

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The four-week moving average, a better gauge of the trajectory of the labor market, fell to 311,500, the best showing since August 2007, before the recession started.

The claims, which reflect employer layoffs, have been see-sawing for weeks near their lowest levels in years.

That is a good sign for overall hiring, which is expected to accelerate this spring and into the summer.

The May jobs report will be released next Friday and will provide a better idea as to whether employers are putting the cold winter months behind them and picking up their rate of hiring.

Employers added 288,000 jobs in April and the unemployment rate fell to 6.3 percent, although that was mostly due to a drop in the labor participation rate.

A separate report on Thursday showed that the economy shrank at a 1 percent annual rate in the first quarter because of the cold winter.

But economists consider the reasons for the contraction as temporary and expect the economy to rebound to a nearly 4 percent annual pace of growth this spring.