Unemployment applications lowest since April '08
By DANIEL WAGNER, AP Business Writer
WASHINGTON (AP) -- The number of people applying for unemployment benefits dropped last week to its lowest level since April 2008, extending a downward trend that shows the job market strengthening.
New applications for unemployment benefits fell last week by 4,000 to a seasonally adjusted 364,000, the Labor Department said Thursday. It was the third straight weekly decrease.
The four-week moving average, a less volatile measure, fell for the 11th time in 13 weeks. At 380,250, it was the lowest average since June 2008.
Applications generally must fall below 375,000 -- consistently-- before hiring is strong enough to reduce the unemployment rate.
Unemployment applications are a measure of the pace of layoffs. Job cuts have fallen sharply since the recession, though employers have been slow to start hiring.
The declining number of applications suggests that the economy may finally be regaining strength, two and a half long years after the end of the Great Recession. The nation added at least 100,000 jobs every month from July through November, the first five-month streak since 2006.
In the past three months, employers have added an average of 143,000 net jobs a month. That compares with an average of 84,000 in the previous three months.
More small businesses plan to hire than at any time in three years, a trade group said last week. A separate private-sector survey found more companies are planning to add workers than at any time since 2008.
Overall economic growth appears to be tracking the job market's improvement. The economy was barely growing when the year started. In the final quarter, growth might exceed 3 percent, up from 2 percent in the July-September period.
Still, applications for unemployment benefits are above the level needed to lower the unemployment rate significantly. The four-week moving average for new claims has exceeded that number since June 2008. Unemployment has been above 8 percent for almost three years.
Before the recession, there generally were 280,000 to 350,000 new applications for unemployment benefits each week. The number peaked at 659,000 in March 2009.
The unemployment rate fell in November to 8.6 percent from 9 percent, but about half that decline occurred because many of the unemployed gave up looking for work. When people stop looking for a job, they're no longer counted as unemployed.
And weak hiring doesn't always appear in unemployment claims data. Employers slashed payrolls deeply during the recession. If they're worried about the slow pace of recovery, they may hold off layoffs -- but not hire, either. (Copyright 2011 by The Associated Press. All Rights Reserved.)