Total Unemployment Claims Drop

Weekly unemployment claims fell for the first time in five months, the latest "green shoot" to pop up this spring and raise hopes the economy may soon begin to recover.

Seasonally adjusted claims for unemployment compensation dropped by 15,000 for the week ending May 23, according to figures released today by the Labor Department. It was the first decline in total claims since the first week in January and broke a streak of 17 straight weeks in which unemployment claims set a new record. The seasonally adjusted total for the week was 6,735,000.

In addition, new unemployment filings declined for the third week in a row, dropping by 4,000 for the week ending May 30, for a seasonally adjusted total of 621,000.

Still, the good news might be short-lived. Experts expect that total unemployment figures, to be released Friday, will show that the economy shed another 500,000 jobs in May. Furthermore, the direct and secondary impacts of Monday's bankruptcy filing by General Motors will likely push up claims again.

In a separate report, the Labor Department also said that nonfarm business productivity rose in the first quarter of the year as businesses tightened payrolls in response to weak demand. The 1.6 percent increase was higher than experts had expected, and followed a 0.6 percent decline in the fourth quarter of 2008.

Meanwhile, manufacturing productivity declined by 2.7 percent in the quarter. Productivity, which is defined as output per working hour, is a key measure of economic efficiency.

Total economic output continued to drop at a substantial pace, however, declining by 7.6 percent for nonfarm businesses, and 21.7 percent in manufacturing for the quarter.