Weekly jobless claims drop sharply to 323,000 as layoffs ease

WASHINGTON -- Initial jobless claims fell sharply last week to their lowest level in three months, the Labor Department said Thursday, as a private report showed layoffs eased in February.

About 323,000 people filed for first-time unemployment benefits in the week ending Saturday, down from 349,000, the previous week, the Labor Department said.

The falloff was steeper than that expected by analysts, who had forecast 338,000 first-time claims. Last week’s figure was the lowest since the end of November.

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Also on Thursday, outplacement consulting firm Challenger, Gray & Christmas Inc. said the pace of business downsizing decreased last month. U.S. employers announced 41,835 planned layoffs in February, down 7.3% from the previous month, it said.

The two reports offered positive glimmers heading into Friday’s government jobs report amid a recent slew of weak economic data triggered by extreme winter weather.

Economists project that the economy added 150,000 net new jobs in February, up from 113,000 the previous month. The unemployment rate is forecast to remain at 6.6%.

However, those estimates were called into question Wednesday after payroll processing firm Automatic Data Processing estimated that the private sector added a disappointing 139,000 net new jobs last month, below analyst expectations.

At the same time, the Institute for Supply Management said growth in the crucial service sector fell to a four-month low last month.

Weekly jobless claims below 350,000 indicate moderate labor market growth. The four-week moving average dropped by 2,000 last week, to 336,500.

Planned layoffs last month were down 24% from a year ago and marked the lowest February total since 2000, Challenger said. Announced job cuts in the first two months of the year were 9.2% less than for the same period in 2013.

Banks and other financial firms had the most announced job cuts in February, with 9,791, about double the amount in January.

Although some cuts resulted from less mortgage lending, a large portion came as banks reduced the number of tellers as customers shift to mobile banking, said John A. Challenger, the outplacement firm’s chief executive.

“These are the kinds of cuts we don’t see in a recession,” he said. “These are successful companies taking proactive steps to adjust to new realities.”