Jobless claims fall; productivity is up

Before the stock market went nutty, there was some good economic news today.

First-time jobless claims fell by 7,000 last week to a seasonally adjusted 444,000, the Labor Department said. The number was in line with expectations and the third straight week of declines.

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The report comes a day ahead of the government's April nonfarm payrolls report. Economists are looking for a gain of 185,000 jobs. The report is due at 8:30 a.m. ET on Friday.

The four-week moving average of initial claims, which takes out weekly volatility, fell by 4,750 to 458,500 last week.

The number of people continuing to receive jobless benefits dropped by 59,000, to 4.59 million, in the week ended April 24; economists had expected a decline to 4.61 million. The continuing claims figure does not include the number of people receiving extended benefits under federal programs.

A separate report from the Labor Department said that productivity rose at a 3.6% annual rate in the first quarter, the smallest pace in a year, after rising at a 6.3% pace in the fourth quarter.

But the gain was better than expected. Economists were looking for employee output to have risen at a 2.5% pace.

Unit labor costs fell at a 1.6% pace last quarter after a 5.6% drop in the fourth quarter. Economists had expected costs to have declined 0.7%. 

The decline in jobless claims comes as there's more evidence that companies are starting to hire.

Companies in the U.S. added workers in April for a third month, according to data on private employment from ADP Employer Services. The 32,000 increase was the most since January 2008 and followed a revised 19,000 gain the prior month, the figures showed.

Elizabeth Strott contributed to this report.