Summary Box: Jobless claims drop in positive sign for economy

Summary Box: Jobless claims drop as layoffs slow

WHAT HAPPENED: The government said Thursday that initial jobless claims fell to 550,000 last week from 588,000 the previous week. While still high, new claims have dropped by about 50,000 in the past month.

WHAT’S IT MEAN?: Initial jobless claims track layoffs, so many economists see the drop as evidence that companies are cutting fewer jobs. Many businesses have cut inventories so low that they’re expected to ramp up production to restock their shelves.

DOES THAT MEAN COMPANIES ARE HIRING?: Not yet. Economists expect the jobless rate will rise to 9.6 percent when the government issues its July unemployment report on Friday — and to rise further in coming months. Businesses likely cut 320,000 jobs in July, economists say, down from 467,000 in June and an average of nearly 700,000 earlier this year.