US labour market, income data point to drawn-out economic recovery

WASHINGTON: The number of Americans filing new claims for jobless benefits fell last week but remained at recession levels, while personal income dropped in August, underscoring the need for another government rescue package for businesses and the unemployed.

The decline in initial claims reported by the Labour Department on Thursday likely reflected a decision by California, the most populous state in the nation, to suspend the processing of new applications for two weeks to combat fraud. Factory activity slowed in September, other data showed. Initial claims for state unemployment benefits decreased 36,000 to a seasonally adjusted 837,000 for the week ended Sept. 26.

Economists polled by Reuters had forecast 850,000 applications in the latest week. Though filings have dropped from a record 6.867 million at the end of March, they remain well above their 665,000 peak during the 2007-2009 Great Recession. A separate report on Thursday from the Commerce Department showed personal income dropped 2.7% in August, reflecting a decrease in unemployment insurance benefits. A $600 unemployment subsidy ended in July and was replaced by a $300 supplement.