By Shobhana Chandra & Bob Willis
Fewer American workers filed claims for jobless benefits last week, signaling that the worst phase of the employment slump has passed.
Initial applications for unemployment insurance fell by 4,000 to 621,000 in the week ended May 30, in line with forecasts, figures from the Labor Department showed today in Washington. Another Labor report showed worker productivity rose more in the first quarter than previously estimated.
Greater efficiency is contributing to an improvement in profits that will likely lead to fewer job cuts in coming months, analysts said. Companies such as United Technologies Corp. are among those that have slashed payrolls to control labor costs and boost earnings, a step that may help get the economy out of the worst recession in half a century.
“Employers are far advanced in the pace of job cuts,” said John Herrmann, president of Herrmann Forecasting in Summit, New Jersey. Firings “should slow materially” in coming months, he said.
The claims report also showed the number of people collecting unemployment insurance fell to 6.74 million in the week ended May 23 from 6.75 million the prior week. It was the first decrease in almost five months, breaking a string of 17 consecutive records.