WASHINGTON - On the surface, the government seemed to signal yesterday that more Americans are finding jobs: The number of people receiving unemployment benefits fell for the first time since early January.
But that does not necessarily mean more companies are hiring. Fewer people are receiving jobless aid largely because more of them have exhausted their standard unemployment benefits, which typically last 26 weeks. Congress has extended the benefit period, but many recipients have still exhausted it.
Government figures, in fact, show the proportion of recipients who used up their jobless benefits in May topped 49 percent, a monthly record.
And while many analysts expect the recession to end by late summer or fall, they warn that unemployment will stay high into 2010.
"It is unlikely that new hiring has picked up in any meaningful fashion," Joshua Shapiro, chief economist with MFR Inc., a consulting firm, wrote in a note to clients. The reason: Most companies hesitate to hire until they see business activity actually increasing.
The Labor Department report showed that the number of people receiving unemployment benefits fell 148,000, to 6.69 million, in the week that ended June 6 - the largest drop in more than seven years. The decline broke a string of 21 straight increases in the number of people claiming benefits for more than a week, the last 19 of which were records.
Initial claims for jobless benefits rose 3,000 to a seasonally adjusted 608,000 in the week ended June 13, above analysts' expectations. But the four-week average, which smooths out fluctuations, fell 7,000, to 615,750. Figures for continuing claims lag behind those for initial claims by a week.
The four-week average is at its lowest point since mid-February, further evidence that the pace of job cuts is slowing.