Unemployment claims drop unexpectedly
Three years after the onset of the Great Recession, signs are mounting that employers might at last be starting to hire new workers.
On Thursday, the Labor Department reported that new claims for unemployment benefits unexpectedly dropped below 400,000 last week for the first time since mid-2008 -- breaking a threshold in what economists say is a hopeful sign that the jobless rate, stuck near 10% for more than a year, might soon finally begin to edge down.
The weather and the holiday period may have exaggerated the improvement in what can be volatile numbers. And given the disappointing job-growth numbers for November and other economic risks such as the depressed housing market, analysts remained cautious about reading too much into the data.
But the sharp drop in initial jobless claims -- considered a signal of future economic trends -- was consistent with other reports suggesting a steady if slow healing of the labor market. Surveys by business groups and other recent economic statistics such as retail sales and manufacturing activity, plus the expected stimulus from this month’s tax-cut deal, point to a stronger recovery ahead. That bodes well for hiring in the coming months.
“This is certainly a great sign that we end the year with a bang, finally breaking this 400,000 barrier,” said John Challenger, chief executive of outplacement at the consulting firm Challenger, Gray & Christmas. “It doesn’t mean clear sailing from here, but it does mean another notch in the jobs recovery.”
The latest numbers, for the week ended Dec. 25, showed 388,000 new filings for unemployment benefits on a seasonally adjusted basis. That’s down from 422,000 claimants in the previous week and from more than 500,000 in mid-August. Most analysts were expecting a decline of just a few thousand from the week before.
