U.S. Jobless Claims Plunge

Initial claims in the U.S. for unemployment insurance dropped dramatically last week, falling to 296,000 from the previous week's revised figured of 332,000, the U.S. Labor Department reported on April 21. Economists generally had expected a decline in claims, but only to about 326,000.

The department's four-week moving index of claims also fell last week, declining to 330,250 from 338,750 the week before.

The dramatic drop in weekly claims, however, is not consistent with the continued caution within several segments of the U.S. economy, including manufacturing, about adding significantly to payrolls. Indeed, the four-week moving average is often regarded as a better indicator of underlying labor market conditions because it smooths out week-to-week changes. And for the period ending April 16 the four-week moving average was suggesting continued caution about adding jobs.

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