Jobless claims down

   WASHINGTON _ The number of newly laid off workers seeking
unemployment benefits dropped much more than expected last week.
    The Labor Department reported Thursday that applications for
unemployment benefits fell to 365,000, a decline of 18,000 from the
previous week. Economists had been looking for a much smaller
decrease of around 5,000.
    Weekly jobless claims have been exceptionally volatile in recent
weeks because of strike-related layoffs in the auto industry and an
unusually early Easter, which has played havoc with the
government's seasonal adjustment measurements.
    Many economists believe that a prolonged housing slump and
severe credit crisis have pushed the economy into a recession. For
that reason, they believe job layoffs will rise in coming months as
the unemployment rate climbs higher.
    Ian Shepherdson, chief U.S. economist for High Frequency
Economics, said that even with the improvement this week, claims
are now at a level equal to where they were at the start of the
last recession in March 2001. He predicted that layoffs would
increase further in coming months.
    However, many economists believe that job losses will be less
severe than in previous recessions because they are expecting this
downturn to be relatively mild and brief. The Bush administration
is counting on 130 million economic stimulus payments to boost
consumer spending and trigger a rebound in growth starting this
summer.
    The Labor Department reported last week that employers cut jobs
for a fourth straight month, often a sign of a recession, but the
job loss of 20,000 was much smaller than had been expected and was
well below the 81,000 jobs lost in March.
    In other economic news, consumers gave retailers some relief in
April after a long stretch of dismal sales. Early reports from the
nation's big chain stores showed customers bought the basics at
discounters and wholesale clubs, putting Wal-Mart Stores Inc. and
Costco Wholesale Corp. among the top performers last month.
    Analysts predicted that the flood of rebate checks will boost
sales in coming months, helping to offset soaring gasoline prices
and falling home values.
    The report on jobless claims showed that the total number of
laid off workers receiving benefits dipped slightly to 3.02 million
for the week ending April 26 but remained above the 3 million-mark
for the second straight week.
    For the week ending April 26, 32 states and territories had a
drop in initial claims while 21 had increases.
    The biggest increase was in Massachusetts, a rise of 5,591 that
was attributed to higher layoffs in transportation, services and
public administration.
    Other states with big increases were New York, up 4,648;
Kentucky, up 3,776, and New Jersey, up 3,521.
    The state with the biggest decline was Texas, where jobless
claims fell by 3,373, reflecting fewer layoffs in trade, service
and manufacturing industries. Other states with large declines were
Rhode Island, down 1,835; California, down 1,689, and Pennsylvania,
down 1,597.