Unemployment Claims Drop, Another Sign of Possible Economic Turnaround

The Labor Department reported today that the number of Americans collecting unemployment benefits fell for the first time since January, a sign that the economy is slowly recovering.

Total unemployment rolls declined by 148,000 to 6.69 million in the first week of June, the largest weekly drop in more than seven years. The decline also breaks a streak of 21 consecutive weeks in which the number of people collecting jobless benefits for more than a week increased.

But new jobless claims rose slightly last week, indicating that while the job market is beginning to stabilize, the economic gloom is far from over. Initial jobless claims rose by 3,000 to 608,000, in line with what economists predicted as layoffs continued in the struggling car and construction industries.

Change in the Conference Board's Leading Economic Index also offered encouraging signs that the economy is on a path to recovery. The index rose 1.2 percent in May, the New York-based research group announced today.

"The recession is losing steam," Conference Board economist Ken Goldstein said in a statement. "If these trends continue, expect a slow recovery beginning before the end of the year."

Despite the good news, millions of Americans still receive unemployment benefits under an emergency federal program authorized by Congress last summer and extended by the Obama administration's stimulus package.