Unemployment claims drop to lowest level in more than a year
A Labor Department report on unemployment claims is better than economists had predicted. But analysts say it’s likely to be several months before the economy starts adding jobs.
A closely watched barometer of America’s job market – the number of weekly unemployment claims – fell to its lowest level since the collapse of Lehman Brothers, whose failure deepened the financial crisis more than a year ago.
New jobless claims declined to 432,000, the Labor Department said. The news was better than economists had predicted, and confirms a trend of improvement in recent weeks that suggests that recession-related job losses are winding down. But many forecasters still see weakness ahead for several months before the economy starts adding jobs.
During good times, weekly jobless claims typically run at a pace of about 300,000. During the early part of this year, the initial-claims pace was running above 600,000.
'Another welcome improvement'
Andrew Tilton, an economist at the investment firm Goldman Sachs, said the report was “another welcome improvement in jobless claims to close out the year, with new claims setting a post-Lehman low.”
The number of continuing claims for unemployment insurance (the total number of people receiving regular benefits) moved below 5 million. But in his written analysis, Mr. Tilton cautioned that the total number of beneficiaries including extended benefits continues to drift up slightly.
The news also comes as the nation still faces an enormous gap to fill in the job market. The decade that draws to a close Thursday will be the first one on record in which the number of private sector jobs was smaller at the end than at the beginning of the decade.
Good end to a bad decade
The Labor Department counts 108.5 million nonfarm private-sector jobs as of November, which is 1.5 million fewer than when the decade began. The public sector added jobs during the decade. But the tally of all US jobs, including government positions, is positive by only 464,000 jobs for the whole 10-year stretch. That’s a big problem for a nation where population has risen by about 27 million residents during that time, according to Census estimates.
Currently, 15 million people are unemployed, and several million more are classified as discouraged job-seekers who have dropped out of the labor force.
The economists at Goldman Sachs estimate that the economy will lose another 25,000 jobs during December. Still, the improvement in jobless claims bolsters some forecasters’ expectations that the US could begin to add jobs during the first half of 2010.
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