Thu Jul 8

WASHINGTON (AFP) - The number of newly jobless people in the United States plunged to a near four-year low last week, government figures showed, an encouraging sign for the labor market.

But officials warned against reading too much into the figures, saying they were often volatile at this time of year.

New claims for unemployment benefits tumbled 39,000 to a seasonally adjusted 310,000 -- the lowest since October 8, 2000 -- in the week ended July 3, the Labor Department (news - web sites) said.

The slump far exceeded the moderate decline predicted by analysts.

Claims had been unchanged the week before.

A four-week average of new unemployment benefit claims, which irons out some weekly statistical wrinkles, fell 10,250 to 336,000.

Seasonal adjustments at this time of year could skew the figures, however, a Labor Department official said.

"A certain volatility is not uncommon in June and July," the official said, cautioning that people should not lend "too much importance" to the single week's data.

Factories tend to retool each summer, laying off workers, but the data for the switch changes from year to year, said a report by Merrill Lynch economists Ron Wexler and David Rosenberg.

"Because it is so hard to seasonally adjust the claims data this time of year, we would not read too much into this sharp decline," they said, predicting a "payback" next week.

Developments in the job market could be crucial to President George W. Bush (news - web sites)'s fight for reelection November 2 in the face of criticism of his economic policy by Democratic challenger John Kerry (news - web sites).

Commerce Secretary Donald Evans hailed the weekly jobs data, saying the report underscored signs of strong employment in recent industry surveys.

"More people are working today in America than ever before," Evans said in a statement.

In fact, there has been a net loss of more than a million jobs since Bush's administration began in January 2001 despite the creation of 1.5 million jobs since August last year.

Employers took on an extra 112,000 new jobs in June, fewer than half of the 250,000 predicted by economists, the government said in a report last week. And manufacturing jobs fell in June, snapping a four-month expansion.

An industry survey Thursday pointed to strength in manufacturing, however.

A barometer of the US manufacturing outlook hit a third consecutive record high in June.

The Manufacturers Alliance/MAPI's composite index, drawn from a survey, rose two points from March to 80 in June -- the highest in the poll's 32-year history.

"The rise in this index, along with the strength shown by all the individual indexes, indicates that the expansion of manufacturing activity is real and robust," said survey coordinator Donald Norman.

The official monthly figures, released last week, showed a surprise slump in employment growth in June.

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