New evidence suggests that layoffs have eased as the number of laid-off workers filing claims for jobless benefits dropped last week. The number of people remaining on the rolls also fell.
Although these figures could indicate the job economy is turning around, they are still hovering above levels associated with a healthy economy. Analysts expect the rate to keep rising.
The Labor Department said Thursday that first-time unemployment claims fell to 570,000 -- down from 580,000 the previous week.
The unemployment rate dipped to 9.4 percent in July from 9.5 percent, its first drop in 15 months.
But the Obama administration said Tuesday that unemployment could reach 10 percent this year and would average 9.8 percent next year.
The recession, which began in December 2007, has eliminated a net total of 6.7 million jobs.
The large number of people remaining on the rolls is an indication that unemployed workers are still having a hard time finding new jobs.
Among the states, Michigan reported the largest increase in initial claims, with 4,068, which it attributed to layoffs in the auto industry. Pennsylvania, Florida, Puerto Rico and Missouri had the next largest increases.
California reported the largest decrease in claims of 6,286, which it attributed to fewer layoffs in the service industries. Tennessee, Texas, Wisconsin and Ohio had the next largest drops.