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WASHINGTON – The number of newly laid-off workers filing claims for unemployment benefits dropped unexpectedly last week, a sign the job market is healing as the economy slowly recovers.

RELATED: Jobless Funds In 40 States Going “Absolutely Broke”

New jobless claims have dropped steadily since September, raising hopes that the economy may soon begin creating jobs and the unemployment rate could decline. That, in turn, would give households more money to spend and add fuel to the broader economic rebound that began earlier this year.

The Labor Department said Thursday that new claims for unemployment insurance fell by 22,000 to a seasonally adjusted 432,000, the lowest since July 2008. That’s much better than the rise to 460,000 that Wall Street economists expected.

The four-week average, which smooths fluctuations, fell for the 17th straight week to 460,250, the lowest since September 2008, when the financial crisis intensified. The crisis led to widespread mass layoffs, which sent jobless claims to as high as 674,000 last spring.

Analysts cautioned that the weekly data could be artificially low due to seasonal factors, such as the Christmas holiday and recent snowstorms.

Still, many economists saw the claims figures as a positive sign that employers could soon step up hiring. Abiel Reinhart, an economist at JPMorgan Chase, said in a note to clients that he estimates employers added a net total of 40,000 jobs in December, after cutting 11,000 the previous month.

RELATED: New Jobless Claims Fall To Lowest Level In A Year

The Labor Department will report the unemployment rate and jobs figures Jan. 8. Reinhart said the December jobless rate will likely be 10 percent, matching the previous month and down from 10.2 percent, a 26-year high, in October.

Still, most economists expect the unemployment rate to remain above 9 percent through 2010, as companies are likely to hire at a slow pace as they wait to see if the current recovery continues.

The stock market fell slightly in morning trading. The Dow Jones industrial average dipped 24 points, while broader indexes also edged down.

Economists closely monitor initial claims, which are considered a gauge of the pace of layoffs and an indication of companies’ willingness to hire new workers.

The number of jobless workers continuing to claim benefits, meanwhile, dropped by 57,000 to 4.9 million, also better than the increase that analysts expected.

But the so-called continuing claims do not include millions of people that have used up the regular 26 weeks of benefits typically provided by states, and are receiving extended benefits for up to 73 additional weeks, paid for by the federal government.

About 4.8 million people were receiving extended benefits in the week ended Dec. 12, the latest data available, an increase of 200,000 from the previous week. The rise is partly a result of another extension of benefits by Congress in November.

President Obama earlier this month signed legislation that continues the extended federal benefits for the first two months of next year. That will prevent about 2 million jobless workers from running out of benefits in January and February, according to an estimate by the National Employment Law Project, a nonprofit group.

But up to a million additional people could run out of benefits in March if the emergency benefits aren’t continued for the rest of the year, the NELP has said.

Among the states, Michigan had the largest increase in initial claims, with 8,382, which it attributed to layoffs in the auto industry. California, Florida, Iowa and Missouri saw the next largest increases. The state data lags initial claims by one week.

Tennessee saw the largest decrease, of 2,972, followed by Illinois, Pennsylvania, Georgia and North Carolina.

Tags: Recession, Unemployment
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  • http://www.blackplanet.com/_A_/ _A_

    Lets see what this number does after all the seasonal workers are laid off!

  • http://www.blackplanet.com/MR_NANASTROKER/ MR_NANASTROKER

    yes indeed _A_

    this shlt is not NEWS!!!!
    many are dealing and living these claims and the ones that cannot claim unemployment…well I can only imagine what they are going through….I am directly affected by this crime……it is hard 2 deal with A default that I had no part of and let alone trying 2 fathom a way 2 do what the fuk I need 2 do

  • http://www.blackplanet.com/CaliFemme23/ CaliFemme23

    This is a bullshyt study…Unemployment claims have ‘fallen’ because 1. some dont qualify for the current quarter they might be in, 2. some have exhausted thier claims, 3.some have not earned enough in the quarter to qualify, 4. SOME PEOPLE HAVE JUST GIVEN UP LOOKING FOR WORK BECAUSE ITS NOT OUT THERE! and 5. sadle enough some are simply living off of someone else these days.

    These people need to STOP this false hope shyt and keep things real and upfront. AND damnit I say when is that Christ-like president going to start passing out millions to the black people of america like they thought he promised to do?

  • http://www.blackplanet.com/maatra/ maatra

    The kkkracka is the number 1 liar. Can’t trust JEWSONE I mean NEWSONE

  • http://www.blackplanet.com/jazzwatch/ jazzwatch

    Are they talking about part time. full time and seasonal???? All I see in my paper is seasonal…..the poeple who are writing this article are the ONLY ones that are working…..

  • http://www.blackplanet.com/_A_/ _A_

    @NanaStroker, CaliFemme23, Maatra, Jazzwatch, I just want to personally say thank you for not only bringing insightful information to these blogs, but doing it in a way that is bold, intelligent and straightforward. When I see topics like this, I come to them looking for the words of wisdom you have dropped. Slowly but surely our people are waking up, and once we are fully restored, we won’t have to be dealing with Satan and his traps any longer.

    Peace and Love, and keep bringing that heat in 2010!

  • http://www.blackplanet.com/maatra/ maatra

    Thanx for the Energetic words _A_ Each one teach one.

    2010 I will go harder and harder. I will not let up on this peckerwood

    BANG ON THIS GODDAMN BEAST until IT is NOMORE

  • http://www.blackplanet.com/jazzwatch/ jazzwatch

    _A_, the traps are ALWAYS there, and I’d been told so MANY lies since I can walk (education, jobs. love., etc)…I got for the truth MY way and let NOBODY stop me….

  • http://www.blackplanet.com/jazzwatch/ jazzwatch

    It might be LOWER for those who WASN’t born here; the corner stores and gas station (who works there? Not us!) If you count the lower paying jobs, like White Castle or Mickey Ds. O.K., And what about those NEW buildings going up that will hire 200 workers???? I could have a degree in Graphics, but still couldn’t land that job, and give it to one of THEM…sure unemployment is lower, not to us though…

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