Jobless Claims Ebb, GDP Holds Steady

WASHINGTON (TheStreet) -- Fewer people from the unemployed ranks filed for jobless benefits last week and, in a separate report, federal officials said gross domestic product needed no revision following an earlier estimate that had bested expectations.

According to the Labor Department, the number of first timers applying for unemployment insurance improved slightly, dropping by 10,000 to a seasonally-adjusted rate of 570,000 for the week ending August 22. That was slightly worse than forecasts from economists, who were looking for 565,000 new claims.

The four-week moving average for initial claims, which tends to smooth out wild week-to-week fluctuations, fell to 566,250 from 571,000.

In moderately good news, the number of those who stayed on jobless benefit roles for the week ended Aug. 15 fell to 6.13 million from the previous week's 6.25 million.

Even though trends appear to be headed in the right direction, many economists still expect the unemployment rate to top 10% by the end of the year.

Unsurprisingly, the state with the biggest jump in first-time claims by far was Michigan, with its pained automobile industry.

Layoffs in the furniture, primary metals, trade and service industries landed Pennsylvania behind Michigan.

On the other hand, California saw the biggest drop in first-time enrollees. The state cited fewer layoffs in the service industry as the key driver.

In a separate report, Commerce Department number-crunchers said that the economy contracted by a seasonally adjusted 1% annual rate, just as the group had projected in advance figures at the end of July. That's better than economists' forecasts. They were looking for the government to revise the decline to 1.5%.

The department said parity was largely reached in its revisions, as downward adjustments to segments like inventories were balanced by upward corrections in areas like residential fixed investment and exports.

Since August began, Altera(ALTR Quote), United Parcel Service(UPS Quote), Lockheed Martin(LMT Quote) and General Electric(GE Quote) have all announced jobs cuts.

-- Reported by Sung Moss in New York