631K new jobless claims, total benefit rolls 6.7M

WASHINGTON (AP) — The number of newly laid-off workers requesting unemployment insurance dropped slightly last week after spiking due to auto layoffs, while continuing jobless claims inched closer to 7 million.

The Labor Department said Thursday that initial claims for jobless benefits fell to a seasonally adjusted 631,000, down from a revised figure of 643,000 the previous week. That nearly matched analysts' expectations of 630,000 new claims.

Claims jumped two weeks ago as Chrysler LLC shut its factories after filing for bankruptcy protection April 30, putting up to 27,000 hourly employees out of work. Wall Street economists expect factory shutdowns by Chrysler and General Motors Corp. to inflate the initial claims numbers through June.

The number of people continuing to claim unemployment insurance rose to nearly 6.7 million from about 6.6 million, the department said, also close to analysts' expectations. That's the highest total on records dating to 1967 and the 16th straight record.

The data reinforced the notion that while the overall economy may start to pick up later this year, the labor market likely will remain weak into 2010 and beyond.

As a proportion of the work force, the total jobless benefit rolls are the highest since December 1982, when the economy was emerging from a severe recession. The numbers indicate that laid-off workers are having a difficult time finding new jobs.

The continuing claims data lags initial claims by one week.

The four-week average of new claims, which smooths fluctuations, dipped to 628,500, from 632,000, the department said.