New claims for jobless aid dropped by 31,000 to 473,000—the first decline in a month—the U.S. Labor Department said Thursday. The drop comes after a rise in the previous three weeks that sent claims to their highest levels in nine months. However, Jobless aid claims remain higher than they would in a healthy economy as employers are reluctant to hire with the slowing economic recovery. The report is “mildly encouraging” but should be treated with caution because the weekly claims report is highly volatile, said Doug Porter, an economist at BMO Capital Markets. The Labor department said that more people are joining extended unemployment aid programs since they were renewed last month by Congress. About 10.1 million people were receiving unemployment checks in the week ending August 7, up about 260,000 from the previous week. The economy has grown for four straight quarters, but the pace has slowed from a 5 percent annual rate in last year's fourth quarter to 3.7 percent in the January-to-March period. It has weakened even further in the past several months. The housing sector is also slowing the economic recovery. New home sale fell 12.4 percent in July to the lowest level in about 50 years, the U.S. government reported on Wednesday. Another report showed that sales of previously occupied home fell to their lowest level in 15 years. Jobless claims fell steadily last year from a peak of 651,000 in March 2009 to about 460,000 at the beginning of this year. Claims started climbing again last month.
