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Jobless Claims Decline Signals Improving Labor Market

Jobs may still be tough to get these days, but they could be getting a little easier to keep.

The number of Americans filing for unemployment benefits hit a five-year low last week, signaling that companies are becoming less liberal in handing out pink slips.

“That’s a very positive development,” Michelle Girard, senior U.S. economist at RBS Securities, told the Daily News.

“That doesn’t mean more firms are beginning to hire, but historically, it has been a good indicator of overall labor market conditions.”

The upbeat report, along with an interest rate cut by the European Central Bank, sent stocks rocketing upward. The Dow vaulted more than 100 points.

First-time applications for jobless insurance payments dropped by 18,000 to 324,000, the Labor Department said.

It was the fewest since January 2008, just as the 2007-2009 recession was setting in. The total came in below economists’ forecast .

A private report also hinted corporate America is holding back on downsizing. Job cuts by U.S. employers in April totaled 38,121, down 23 percent from the prior month and down 6 percent from a year earlier, according to Challenger, Gray & Christmas.

Year-to-date, the pace of layoffs is about where it was a year ago, the report showed.

Still, worries about the economy and the impact of tax hikes and government spending cuts may be keeping companies from getting too excited about bringing on new staff.

Economists expect data due on Friday will show the U.S. created about 150,000 new jobs in April after a dismal March.

“It’s a relatively good number given March and where we were (earlier in) the recovery,” IHS Global Insight senior economist Chris Christopher told The News. “But we’re not going to break out champagne and celebrate.”
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