Initial Claims Fall 6,000 to 462,000

WASHINGTON (TheStreet) -- The volume of workers applying for state unemployment insurance for the first time continued to wane last week, according to a government report, suggesting layoffs may have leveled off in recent weeks.

The number of initial jobless claims for the week ended March 6 fell by 6,000 to a seasonally adjusted 462,000, according to a Labor Department report released Thursday. Analysts had projected new claims would drop to 460,000 from last week's pre-revised 469,000 total, according to consensus figures provided by Briefing.com.

Investors took the new claims data in stride. Stocks traded lower Thursday morning, pressured chiefly by concerns that inflation in China may result in more monetary tightening measures.

"There wasn't much of a change [in initial claims], so it's not going to have that much of an effect on the market," added Neil Hennessy, portfolio manager and chief investment officer of Hennessy Funds. "We're still looking for clarity out of Washington."

But other numbers in the report hinted at a precarious labor market as jobs creation remains elusive. The four-week moving average for initial claims, which offers market observers a more settled view of claims beyond wild weekly gyrations, increased to 475,500 from 470,500.

The number of continuing claims also increased by 37,000 for the week ended Feb. 27, ticking up to 4.558 million.

Brian Bethune, chief U.S. financial economist at Global Insight, cited underwhelming sentiment in the small business community and reiterated policy uncertainty from Capitol Hill as the main drags on the labor market.

"The wheels of the recovery are turning slowly, but grinding finely," Bethune said. "We're just not at the point yet where we're going to see any breakout in terms of improvement."

Some layoff announcements continued to bubble up in recent days and weeks. This week alone, Chevron(CVX) announced plans to shed 2,000 jobs amid struggles in its refining operations. Earlier, the Los Angeles Times reported that ABC, a Walt Disney(DIS) unit, would slash up to 20% of its news division jobs because of a sluggish ad market.

A separate government report released last Friday offered further debate fodder regarding the labor market. Employers shed another 36,000 last month, though the nation's unemployment rate held steady at 9.7%. The country's so-called "underemployment" rate, which includes part-timers looking for full-time work and a collection of unemployed who stopped looking all together, edged up to 16.8% from 16.5%. Weather-related closings throughout the northeast may have skewed some figures, but the government report said it was difficult to discern the impact.

Elsewhere, the nation's international trade deficit narrowed to $37.3 billion in January. The gap came in better than expected, as the Street consensus had projected a deficit at $41 billion.

-- Written by Sung Moss in New York

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