Jobless Claims Keep Dropping – But Not Below 400,000 Mark

June 26, 2003 ( - The number of Americans joining the queue for initial unemployment benefits plunged for the second week in a row - but the total still signals a sluggish job market.

According to the latest data from the US Department of Labor (DoL), 404,000 idled workers applied for jobless insurance payments in the week ending June 21, down 22,000 from a revised 426,000 a week earlier. At its lowest point since March 22, the latest claims application total followed last week’s DoL report showing a 13,000-drop (See Jobless Claims Fall But Still Show Sluggish Market ).

As it has been in recent weeks, the problem is that the claims total continues to stubbornly cling to a point above the 400,000 mark – a commonly accepted indicator that the job market is still slumbering. Analysts say many employers are still resistant to add to their payrolls before seeing firm evidence that the economy is recovering. Claims totals have stalled above that threshold for the past 19 weeks.

The four-week moving average of the jobless claims – widely followed because it irons out short-term volatility – also fell by 5,250 to 428,250 in the June 21 week from 433,500 in the previous week.

Wall street economists participating in Reuters regular poll had forecast first-time claims would fall to 415,000 compared with DoL’s original estimate of 421,000 in the June 14 week.

In an effort to kick start the economy, the US Federal Reserve on Wednesday slashed the trend-setting federal funds rate by 0.25% to its lowest level in 45 years (See  Fed Slashes Rates to Four Decade Lows).