Washington, DC, May 25, 2006--First time claims for unemployment benefits fell to 329,000 in the week ending May 20, the Labor Department said Thursday, a decrease of 40,000 from the prior week.
Initial claims for the week ending May 13 were revised slightly upward, to 369,000, from the previously reported 367,000.
A partial government shut down in Puerto Rico was behind the higher claims figure for last week.
The four-week moving average of new claims rose by 3,250, to 337,000. It's the highest since Oct. 29, 2005. The previous week's average was revised to 333,750. The four-week average adjusts for weather, holidays, strikes and other one-time events.
The number of people collecting unemployment benefits, meanwhile, rose by 38,000 to 2.42 million in the week ending May 13. The four-week moving average of continuing claims hit a four-and-a-half-year low of 2.41 million.
Initial claims represent the loss of jobs. The level of continuing claims indicates how hard or easy it is for displaced workers to find new jobs.
The initial claims number was unexpected. Economists surveyed by MarketWatch were forecasting claims to fall to 319,000.
Initial claims have stayed about the same over the past year. Continuing claims are down about 7%. Economists say the steady decline in continuing claims indicates the labor market is still strengthening.
But analysts are uncertain about whether the Fed will raise overnight interest rates for a 17th time in late June.
Policymakers may take a break to reassess how much progress the Fed's 16 rate hikes have made in cooling the economy and reducing inflation pressures
