Jobless claims drop last week

WASHINGTON — The number of new people signing up for unemployment benefits dropped last week, a hopeful sign for the job market recovery.

The Labor Department reported Thursday that new applications for jobless benefits declined by a seasonally adjusted 11,000 to 336,000 for the week ending July 31. It marked the lowest level since the beginning of July and was slightly better than some analysts were expecting. They were forecasting claims to fall to around 340,000 for last week.

New claims have bounced up and down in recent weeks, with much of the volatility associated with the impact of temporary shutdowns at auto plants to retool for new models, something that’s done each year. Even so, the long-term trend in claims shows improvement. A year ago claims stood at 399,000.

Separately, many retailers reported lackluster sales gains in July, particularly mall-based apparel chains like Gap. Analysts attributed the disappointing sales to a variety of factors, including higher gasoline prices, which made some people more cautious spenders. Wal-Mart and some other discounters had solid gains. Some high-end stores like Neiman Marcus also did well.

In financial markets, the Dow Jones industrials were off 77 points in early afternoon trading.

The jobless claims report also showed the number of workers continuing to draw unemployment benefits declined by 35,000 to 2.91 million for the week ending July 24, the most recent period for which that information is available. A year ago, that figure was 3.62 million.

While the economic recovery is on a solid path, the labor market recovery has been spotty.

The jobs climate has figured prominently in the presidential campaign, with President Bush and his Democratic rival, John Kerry, offering vastly different assessments on the nation’s economic health.

Economists are hopeful that job creation picked up in July. They are forecasting payrolls to grow by around 247,000, which would mark an improvement from the disappointing 112,000 jobs added in June. The government will release the employment report for July today. The unemployment rate is expected to hold steady at 5.6 percent.

The economy slowed in the April-to-June quarter, growing at an annual rate of 3 percent, down from 4.5 percent in the previous quarter.