WRAPUP 3-US jobless claims fall, but slow recovery seen

* Jobless claims fall a bit less than expected

* Four-week average rises for fourth straight week

* Continuing claims dip for second week
(Adds unemployment hearing, updates markets to close)

By Lucia Mutikani

WASHINGTON, April 29 (BestGrowthStock) – The number of U.S.
workers submitting new claims for unemployment benefits fell
slightly last week, implying only a gradual labor market
improvement even as the economic recovery broadens out.

While the data on Thursday did not change views that
employers probably added to payrolls this month, analysts were
disappointed with how slowly claims were declining and said it
showed companies were reluctant to embark on a hiring spree.

Initial claims for state unemployment benefits fell 11,000
to a seasonally adjusted 448,000, the Labor Department said.
That was slightly below market expectations for 445,000.

“Some companies are still struggling and believe they can
meet any increase in demand with a smaller workforce. The
recovery in the labor market is probably going to be more
modest than a lot of people are expecting,” said Paul Dales, a
U.S. economist at Capital Economics in Toronto.

The Federal Reserve on Wednesday acknowledged the labor
market was improving, but noted that employers remained
reluctant to add payrolls. The U.S. central bank left
overnight benchmark lending rates near zero and renewed its
commitment to keep them low for an extended period.

Economists are concerned that claims remain above 400,000,
a level they say is historically associated with a steady pace
of job growth. Analysts anticipate data next week will show
the unemployment rate was unchanged at 9.7 percent in April
for a fourth straight month.

The report had little effect on U.S. stocks (Read more about the stock market today. ), which climbed
for a second day on a string of robust earnings and as
debt-ridden Greece appeared near to a bailout deal. For Wall
Street, it was the best day in almost two months. Hopes of a
Greek bailout pushed the U.S. dollar down against the euro.

UNEMPLOYMENT TO REMAIN HIGH

Though the manufacturing-led U.S. economic recovery is
spreading out to other sectors, it is probably not vigorous
enough to encourage much hiring. Indications are that
unemployment will likely remain elevated for a while.

Gross domestic product data on Friday is expected to show
the economy grew at a 3.4 percent annual rate in the first
quarter, with much of the advance due to consumer spending,
according to a Reuters survey.

While slower than the fourth-quarter growth at an annual
pace of 5.6 percent, it will be the third straight quarter of
expansion as the economy climbs out of the worst downturn
since the 1930s.

Harvard Professor Lawrence Katz, a leading economist, told
lawmakers on Thursday that the labor market damage from the
recession was so severe that the economy would struggle to
create jobs even with a strong recovery.

“We need over three hundred and thirty-two thousand net
new jobs per month sustained for the next 45 months to make up
for the two years of severe job losses in the Great
Recession,” Katz said.

“This would require even stronger employment growth than
the 2.4 percent per year in the robust 1993 to 2000 recovery
and expansion.”

About 8.2 million people have lost their jobs since the
recession struck in December 2007.

The four-week moving average of new claims, seen as a more
reliable barometer of labor market trends, rose 1,500 to
462,500 last week, the Labor Department said. It was the
fourth straight weekly increase.

Private hiring last month handed the economy its largest
job gain in three years. While analysts believe payrolls grew
again in April, they expect much of the boost to come from
government hiring for the 2010 Census. In the United States,
the Census is taken every 10 years.

“We expect nonfarm payroll hiring of 175,000 for April,
consisting of underlying hiring of 50,000 and a Census
contribution of 125,000,” wrote economists at Goldman Sachs.

The number of people still receiving benefits after an
initial week of aid fell to 4.65 million in the week ended
April 17, a touch above market expectations for 4.62 million.

The insured unemployment rate, which measures the
percentage of the insured labor force that is jobless, was
unchanged at 3.6 percent in the week ended April 17.

Separately, the Chicago Federal Reserve national activity
index rose in March, but still indicated below-trend growth.

Stock Investing
(Reporting by Lucia Mutikani; Additional reporting by Ann
Saphir in Chicago; Editing by Jan Paschal )

WRAPUP 3-US jobless claims fall, but slow recovery seen