Initial Jobless Claims Fall Unexpectedly

Washington, DC, May 22, 2008--Initial jobless claims fell unexpectedly last week to the lowest level in a month.

The Labor Department reported Thursday that initial jobless claims totaled 365,000, down by 9,000 from last week. Economists had expected claims to rise.

Nevertheless, claims remain at a level that indicates the labor market is under stress from the sluggish economy. The four-week average for claims rose slightly to 372,250, up from 300,000 a year ago.

The Federal Reserve said Wednesday that Fed officials now expect economic activity to be much more sluggish this year, with the unemployment rate expected to rise more than the Fed had been forecasting.

The  forecast predicted the unemployment rate will rise to between 5.5 percent and 5.7 percent by the end of this year

The largest increase in initial jobless claims was a rise of 6,637 in Michigan, attributed to higher layoffs in the auto industry.