Jobless claims drop, but remain high

WASHINGTON (AP) -- New claims for state unemployment insurance dipped last week but still remained at a high level, suggesting employers' demand for workers continues to be weak.

The Labor Department reported Thursday that initial applications for jobless benefits dropped 41,000 to a seasonally adjusted 384,000 for the work week ending May 5.

The last time jobless claims stood at 384,000 was July 4, 1998.

Claims for the week ending May 5 were down from the week before, when a revised 425,000 claims were posted -- keeping claims at their highest level since March 23, 1996, when they stood at 428,000.

But in the latest report, the more stable four-week moving average of jobless claims, which smoothes out week-to-week fluctuations, was 402,500, a decrease of 3,000 from the previous week's revised average of 405,500.

The sluggish economy has forced companies to cut jobs and production, and manufacturing has been hardest hit by the slowdown.