Initial jobless claims fall 17,000 to 421,000

The number of U.S. workers who filed new applications for unemployment benefits fell 17,000 last week to 421,000, the Labor Department reported Thursday, resuming a recent downward trend.

Economists polled by MarketWatch had expected initial claims in the week ended Dec. 4 to fall to a seasonally adjusted 425,000. The previous week’s number was revised up 2,000 to 438,000.

After peaking this year at 504,000 in August, weekly claims have gradually declined. Three weeks ago claims fell to 410,000, the lowest level in almost 21/2 years.

The four-week average of new claims, meanwhile, dropped 4,000 to 427,500, the lowest level since August 2008. That average is considered a more accurate barometer of employment trends because it smoothes out quirks in the weekly data.

Most economists believe claims have to move down toward 400,000 or below to indicate a faster pace of hiring.

Even in good economic times, however, weekly claims rarely fall below 300,000 as people constantly move in and out of the workforce.

The data can be especially volatile during the holiday season stretching from Thanksgiving to New Year’s Day. State unemployment offices are open fewer hours and there are often delays in processing claims.

Despite the downward trend in claims and other improving economic data, the latest monthly jobs report issued a week ago showed little improvement in the labor market. The U.S. added just 39,000 net jobs in November, far below Wall Street projections.

Some economists question the report’s accuracy and believe the data could be revised higher, but they will have to wait until the government releases the December report in early January.

In the week ended Nov. 27, the number of people who continued to receive benefits under state unemployment programs declined 191,000 to a seasonally adjusted 4.1 million. The four-week average of continuing claims fell 64,250 to 4.23 million.

The government paid extended federal benefits to 4.51 million people, down almost 400,000 from the prior week.

Bartash writes for MarketWatch.com/McClatchy.