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Jobless-rate decline is steepest in 9 months

It was a sign that the weak economy has not led to widespread layoffs.

WASHINGTON - The number of laid-off workers filing claims for unemployment benefits fell last week by the sharpest amount in nine weeks, indicating that the labor market remains healthy despite the sluggish economy.

The Labor Department said yesterday that applications for jobless benefits totaled 321,000 in the week ended Saturday, a decline of 20,000 from the previous week.

The decline was more than double what economists had been expecting. Analysts said part of the improvement reflected trouble adjusting the weekly claims data around Easter, which does not fall in the same week every year.

It was the second straight weekly decline after the claims data had hit a two-month high, a jump blamed on seasonal adjustment problems around Easter.

The economy has been growing at sub-par rates for the last year, but that weakness has not triggered widespread layoffs, in part because consumer demand has remained strong despite the troubles in housing and parts of manufacturing.

Still, many analysts believe the jobless rate will start rising slightly in coming months, reflecting the sluggish economy and the slowdown in corporate earnings.

"Outside those sectors hit directly by the housing crunch, companies have been reluctant thus far to let people go. But with both [gross domestic product] and earnings growth slowing further, we think this will change," said Ian Shepherdson, chief economist at High Frequency Economics.

The government is to give its first estimate of economic growth in the January-March quarter today. Analysts expect that report to show that GDP was growing at an annual rate of just 1.8 percent in the first quarter, the weakest since late 2005 when the country was struggling to cope with the devastation from Hurricane Katrina.