New jobless claims drop for first time in four weeks

WASHINGTON (AP) — New requests for unemployment benefits fell sharply last week, the first decline in a month and a hopeful sign after a raft of negative economic reports.

New claims for jobless aid dropped by 31,000 to a seasonally adjusted 473,000, the Labor Department said today. Still, claims remain much higher than they would be in a healthy economy. Employers are reluctant to hire as economic growth appears to be slowing.

The drop comes after a steep rise the previous three weeks that sent claims to their highest level in nine months. Those increases raised fears that businesses were starting to layoff more workers.

The report is "mildly encouraging" but should be treated with caution, said Doug Porter, an economist at BMO Capital Markets, because the weekly claims report is highly volatile.

Even with last week's decline, the four-week average, a less volatile measure, rose to 486,750, the most since November 2009.