Unemployment Aid Applications Drop to 9-Month Low

unemployment aid applications drop to 9-month lowWASHINGTON (AP) - The number of people applying for unemployment benefits fell last week to the lowest level in nine months, the latest evidence that the job market is improving.

The Labor Department said Thursday that weekly applications dropped by 23,000 to a seasonally adjusted 381,000. That's the lowest number of applications since late February.

The four-week average, a less volatile measure, fell for the ninth time in 11 weeks to 393,250. That's the lowest average since early April. Applications that drop below 375,000 - consistently - tend to correlate with a steady decline in the unemployment rate.

"There have been numerous indications that the labor market is healing and today's jobless claims report only reinforces that view," Dan Greenhaus, chief global strategist at BTIG, a trading firm.

The unemployment rate fell to 8.6 percent in November, the government said last week, down from 9 percent the previous month. That's the lowest rate in two and a half years.

Still, the unemployment rate dropped last month in part because more people gave up looking for work. Once the unemployed stop looking for jobs and drop out of the work force, they are no longer counted as unemployed.

Employers added a net total of 120,000 jobs last month. The economy has generated 100,000 or more jobs five months in a row - the first time that has happened since April 2006.

The report on hiring gains followed other positive signs. Manufacturing firms are boosting output and retailers reported a strong start to the holiday shopping season. Consumer confidence jumped in November to the highest level since July, and Americans' pay rose in October by the most in seven months.

Many economists expect growth to accelerate in the final three months of the year, to about a 3 percent annual rate. That would be an improvement from 2 percent growth in the July-September period.

But the U.S. economy is vulnerable to shocks from overseas. European leaders are struggling to contain a two-year old debt crisis and the 17 nations that use the euro may already be in recession, economists say.

That could slow U.S. exports and cut into overseas profits earned by U.S. multinationals. Even worse, the crisis could force European banks to cut back on lending and U.S. banks to follow suit, leading to a credit crunch. Most economists are penciling in slower U.S. growth next year, partly because of Europe's slowdown.

Fewer people are receiving unemployment benefits, and the number of people on extended benefits also fell. Some of that decline is because those out of work found jobs. But economists think most have likely used up all their benefits.

The number of people receiving benefits fell by 174,000 to 3.58 million. But that doesn't include several million people receiving aid under extended programs put in place during the recession. All told, 6.6 million people received unemployment aid in the week ending Nov. 19, the latest data available. That's about 400,000 fewer than the previous week.

Congress is debating whether to continue the extended benefit program, which expires at the end of this year. The program provides up to 99 weeks of benefits in states with high unemployment rates. If the program isn't continued, the Labor Department estimates that about 1.8 million people could lose benefits by early February.

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114 Comments

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Michael

If your obama, its great news. People who never had a job, or worked long enough to qualify for unemployment compensation, and can't find work - not counted as unemployed. People who have exhausted their unemployment benefits, - not counted as unemployed. People who have just given up looking - not counted as unemployed. Now if we can figure out how to get those collecting unemployment benefits currently to be not counted as unemployed, we will be at full employement in no time.

December 15 2011 at 6:11 AM Report abuse rate up rate down Reply
savemycountry911

This administration has turned unemployment benefits into another welfare program.

December 12 2011 at 9:37 PM Report abuse +1 rate up rate down Reply
hightest2011

Obama approval rating at 3 year low and still falling. The Illinois Senator notorious for voting "present' in Illinois and now as President has a 29% approval rating. Perhaps the president will resign for "the good of the country' as many people has exhausted their benefits and can no longer file or be counted as unemployed. However it must be reported that aide for food stamps, and federal and state benefits had increased in the past 3 years to all-time high levels.

Now if only Huffy could write an article that has a grain of fact .....?????

December 09 2011 at 9:42 AM Report abuse +3 rate up rate down Reply
pgile

I know lots of people out of work and my situation ain't that great. Besides the govermint lies. So these numbers must be false. I bet unemployment is way higher and people just don't get counted cause they're in the bar.

December 09 2011 at 8:08 AM Report abuse +1 rate up rate down Reply
wbearl

I can't believe that there are people out there who are seeing this as a good sign the economy is recovering. Unemployment claims are dropping because huge numbers of people are running out of Unemployment Compensation Eligibility. It is also the time of years when stored are hiring "Seasonal Workers". My oldest son who is a Paralegal, is still submitting a half dozen resumes a week and competing with a hundred people for every job. Most of the times he doesn't even get a call for an interview, just a thank you letter telling him they found someone else better qualified, usually a young lawyer willing to do paralegal work at paralegal wages just to have an income.

December 09 2011 at 8:03 AM Report abuse +1 rate up rate down Reply
1 reply to wbearl's comment
warrenbent

This is a measure of new filings for unemployment benefits. These don't drop based on people running out of benefits.

In other words, if you filed some time ago, qualified, and subsequently exhausted your benefits, it has no impact on the number of people who lost a job last week, and therefore decided to file.

December 09 2011 at 9:10 AM Report abuse rate up rate down Reply
Michael Keohane

Funy thing! Unemployment claims dropping as Christmas approaches. If I remember correctly, this happens every year as employers are reluctant to cut staff, except for cause, during the holiday season. There wil be a seasonal adjustment next year as employers made the delayed staff cuts. I wonder why some journalists have such poor memories? Is it a job requirement?

December 09 2011 at 7:23 AM Report abuse +2 rate up rate down Reply
1 reply to Michael Keohane's comment
pgile

Funny thing: the unemployment rate has fallen in January more often than its gone up during the past 10 years. Saying things happen doesn't make them so. But it probably makes a lot of people happy thinking they're right, so why confuse things with facts, eh?

December 09 2011 at 9:28 AM Report abuse rate up rate down Reply
jfromulus2

more bs lies by our goverment

December 09 2011 at 7:13 AM Report abuse +3 rate up rate down Reply
Winds

this makes me laugh....
first it is christmas time and all the people who are just working the holidays are "now back to work" of course for only 3 or 4 weeks and also all the people that were on unemployment benefits and there benefits ran out are not counted anymore.
wow I am so glad the unemployment rate has dropped.

December 09 2011 at 6:00 AM Report abuse +1 rate up rate down Reply
1 reply to Winds's comment
warrenbent

"all the people that were on unemployment benefits and there benefits ran out are not counted anymore" for what exactly?

If you mean they are not counted in the number of new filers, you are correct. Because they aren't new filers, and shouldn't be counted.

If you mean they are not counted in the overall unemployment rate, you are incorrect. The unemployment rate is a measure of the percent of the workforce that is not employed, not the percent of the workforce drawing unemployment benefits.

December 09 2011 at 9:13 AM Report abuse rate up rate down Reply
Michele

Too funny.... I work at a doctor's office... a very busy one at that. They are talking of cutting back on hours and eventually lay offs. Things are NOT improving.

December 09 2011 at 5:34 AM Report abuse +1 rate up rate down Reply
lifehub

"The job market is improving"???? That's what this slanted article claims. Half the country is out of work, with most people having run out of their benefits. The second part is that many businesses will not hire any unemployed people, only those currently employed and looking to make transitions. Congress claims that they want to 'stop this practice', but of course zero zilch has been done about it. The economy is as bad as ever and continues to slide.

December 09 2011 at 4:41 AM Report abuse +2 rate up rate down Reply
1 reply to lifehub's comment
warrenbent

Half of the country is out of work?

LOL!

December 09 2011 at 9:14 AM Report abuse rate up rate down Reply