US Jobless Claims in Three-Year Low

WASHINGTON (Reuters) - The number of Americans filing initial claims
for jobless aid dropped sharply last week to the lowest in more than
three years, the government said on Thursday in a further sign of a
reviving employment market.

First-time claims for state unemployment insurance fell 14,000 in the
week ended April 3 to 328,000 - the lowest level since just before
President Bush (news - web sites) took office - from 342,000 the prior
week, the Labor Department (news - web sites) said.


The unexpectedly large drop in claims likely will garner close
attention both at the Federal Reserve (news - web sites) and the White
House.


The drop in claims far exceeded forecasts by Wall Street economists
who had predicted a decline of just 2,000. The Labor Department said
last week's weekly level of jobless claims was the smallest since
320,000 in the week of Jan. 13, 2001.


Last week, the government reported a sharp surge in new jobs during
March with 308,000 positions added to payrolls, and the decline in
jobless claims adds to evidence that hiring conditions may be on the
upswing after a long drought.


The apparent pickup in employment may also hasten an end to a long era
of low interest rates, which saw the Federal Reserve cut its key
lending rate for overnight loans between banks to a 1958 low. The Fed
regularly cites its concern about slack labor markets as a reason for
keeping rates low, though the recent jobs data suggest the slack is
being taken up.


Weak hiring has been a hot issue in the campaign for November's
presidential elections, with Democrats highlighting the overall loss
of jobs since Bush took office while administration officials maintain
an economic upswing will soon give rise to job growth.


The Labor Department's four-week moving average of new claims, which
irons out weekly fluctuations, declined 3,250 last week to 336,750 -
the lowest since 335,750 in the week of Nov. 25, 2000.