Applications for jobless benefits steady, reflecting modest gain

Washington: The number of people seeking US unemployment benefits was unchanged last week, suggesting modest but steady gains in the job market.

The Labour Department said on Thursday that weekly unemployment aid applications stayed at a seasonally adjusted 370,000, the same level as the previous week. The four-week average, a less volatile measure, fell from roughly 380,000 to 375,000.

Applications for benefits surged in April to a five-month high of 392,000. They have fallen back since then and are near the lowest levels in four years.

The decline suggests hiring could pick up in May after slumping in the previous two months. When applications drop below 375,000 a week, it generally suggests hiring is strong enough to lower the unemployment rate.

"Although another decline would have been preferred, the results weren't that bad," Jennifer Lee, an economist at BMO Capital Markets, said in a note to clients. "It does raise the possibility that we may see a pickup in hiring in May."

Focus on Eurozone

Investors didn't react much to the unemployment claims report, economists said. Stock markets are more focused on Europe's financial crisis. Worries that Greece might have to exit the euro bloc drove stocks lower on Thursday.

Still, Dan Greenhaus, chief economic strategist at BTIG LLC, said investors will likely be disappointed the coming weeks if applications don't fall further.

"You'd like to see 350,000 or less to become convinced that monthly employment gains will accelerate," he said.

A measure of future US economy activity fell in April after reaching a three and a half year high in March. The Conference Board, a business research group, said that its index of leading economic indicators dipped 0.1 per cent last month to 95.5.

Before the recession began, the index regularly topped 100.