In a welcome reprieve to disappointing economic news, recent employment numbers came in better than expected. The drop of 27,000 initial unemployment benefits claims was the largest improvement since May of last year.
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The number of claims fell significantly lower to 350,000 than analysts forecast of 380,000. The monthly jobs report for April is slated for Friday, May 4 and is not related to the weekly unemployment benefit claims report.
Expectations for the Friday report are for 170,000 new jobs to have been created. Most of the month of April saw increases in first-time unemployment benefits applications and private sector employers added fewer jobs than predicted. Businesses are having difficulty increasing worker productivity, which means that gains in productivity are coming from cost cutting rather than increased output.
All factors combined still point to an uneven economic recovery but the improvement in first-time claims for unemployment is an encouraging sign that recovery is still an operative word.