Job Market Brightens as Unemployment Claims Sink

Job market brightens as unemployment claims sinkWASHINGTON (AP) - The outlook for the job market is looking brighter.

Far fewer people are seeking unemployment benefits than just three months ago - a sign that layoffs are falling sharply.

The number of people applying for benefits fell last week to 366,000, the fewest since May 2008. If the number stayed that low consistently, it would likely signal that hiring is strong enough to lower unemployment.

The unemployment rate is now 8.6 percent. The last time applications were this low, the rate was 5.4 percent.

The big question is whether fewer layoffs will translate into robust hiring. It hasn't happened yet, even though job growth has increased in recent months.

The four-week average of weekly unemployment applications, which smooths out fluctuations, dropped last week to 387,750. That's the lowest four-week since July 2008. The four-week average has declined in 10 of the past 12 weeks.

"Labor market conditions have taken a turn for the better in recent weeks," Michael Gapen, an economist at Barclays Capital, said in a note to clients. "Payroll growth should improve in the coming months."

Separately, the prices companies pay for factory and farm goods rose 0.3 percent last month. The figure was pushed up by higher food and pharmaceutical prices. But energy prices barely rose, keeping inflation in check.

In the 12 months ending in November, wholesale prices have increased 5.7 percent, the Labor Department said Thursday. It's the smallest year-over-year increase since March.

The department's producer price index measures price changes before they reach consumers.

A mixed picture of manufacturing emerged from other reports Thursday. Factory output fell in November for the first time in seven months, according to the Federal Reserve. Manufacturers made fewer cars, electronics and appliances.

But some economists noted that auto sales rose in November, suggesting that production will rebound.

And the Federal Reserve Banks of Philadelphia and New York said manufacturing expanded in their regions. Manufacturing has been a key source of growth this year.

Still, the U.S. manufacturing sector could weaken in 2012. Growth is slowing in Asia. Europe is likely already in recession. And U.S. companies are reducing their investment in machinery and other large equipment.

The downward trend in applications suggests that companies are cutting fewer workers as the economy picks up. It also comes as Congress is wrangling over whether to extend emergency unemployment benefits, which are set to expire at the end of this year.

Growth may top 3 percent in the final three months of this year, according to many economists. That would be up from 2 percent in the July-September quarter.

Other recent reports suggest the job market is improving a bit. In the past three months, net job gains have averaged 143,000 a month. That compares with an average of 84,000 in the previous three months.

In November, employers added 120,000 jobs, and the unemployment rate fell to 8.6 percent from 9 percent. That was the lowest unemployment rate in 2½ years. But about half that decline occurred because many of the unemployed gave up looking for work. When people stop looking for a job, they're no longer counted as unemployed.

Employers posted fewer jobs in October than in the previous month, the government said Tuesday, though the decline was modest.

Job openings have risen by about 35 percent since the recession officially ended in June 2009. But they're still about 25 percent below pre-recession levels.

More than 7.4 million people are receiving unemployment benefits, according to Thursday's report. About 2 million will lose their benefits by mid-February if the emergency program expires.

Lawmakers differ over how long benefits should last. The House passed a Republican bill Tuesday that would renew emergency aid but reduce the maximum duration to 59 weeks from the current 99 weeks.

Democrats want to keep the full 99 weeks. The measure is part of broader legislation in the Democratic-led Senate that would also extend a Social Security tax cut.

Increase your money and finance knowledge from home

Economics 101

Intro to economics. But fun.

View Course »

Understanding Credit Scores

Credit scores matter -- learn how to improve your score.

View Course »

Add a Comment

*0 / 3000 Character Maximum


Filter by:

Unemployment is a function of money supply. When the money supply deflates, people cannot possibly be employed at levels that allow them to earn the monetary bubble level incomes. Google for "unemployment kondratieff wave" to see another way to look at unemployment: Count who is actually employed.

December 20 2011 at 1:08 AM Report abuse rate up rate down Reply

This admin. is turning unemployment benefits into another welfare program.

December 19 2011 at 4:38 PM Report abuse +1 rate up rate down Reply
Samir semaan

Hello Congress has acted in the last minute to extend the payroll tax and the unemployment benefit and to fund the government for the next two months and to put the pipeline in the bill to shove that bill on the american people what a corruption for the special interest group and to put the president of the united states in a corner to accept a bill for payroll tax and unemployment benefit and to to fund the government. Those bills are good for temporary time they are not solutions to the problem. THE KEY is revenues for the FEDERAL Government and slashing spending so you can use those revenues for infrastructure because till today the housing foreclosures are still looming and dragging this economy. When people are hired the people will have a paycheck and they spend money whether to buy the next TV or the next washer or dryer or new forniture, this will hire more people in the USA. But this has to be done by overhauling the entire Federal Government spending and enforcement laws programs.

December 17 2011 at 1:06 PM Report abuse +1 rate up rate down Reply
1 reply to Samir semaan's comment

Obama worked his own self into a corner since his inauguration by playing partisan politics. He's done nothing but break every promise to the American people on his attempted economic and jobs plan for America. Obama hasn't any intentions of slashing spending that why he's in the corner.
Are you aware of foreigners are brought in this country still today to repair our crumbling infrastructure, while ignoring America's unemployed skilled workers?
This administration had their priorities mixed up from day one that is the only part that is transparent.
Overhauling government spending is as simple as not making government any bigger than it is now.Since Obama's been in office he's added 140,000 government employees, not to mention that he's had nothing but failed attempts to put together a budget. Without one there is no fiscal responsibility to fix the current problem of out of control spending. Yes congress has a spending problem not a revenue problem.
"enforcement laws programs" what ever that is. If you are talking about the inferior job that Eric Holder is doing I could agree to that part, in his case the left hand has no clue the the right one is doing.
Economists since 1989 have been warning government officials about relaxed lending practices which led us to the housing bubble. The sad part is that will remain stagnent until the unemployment situation is brought back within 4.5%. America is in for a long ride back to recovery of any kind.

December 18 2011 at 9:37 AM Report abuse rate up rate down Reply

caught in their own lie on this one. i saw the same article about the ceo's not expected to hire in 2012 also.
it's just an article to stock up the market on wall st.

December 15 2011 at 11:01 PM Report abuse rate up rate down Reply

When people have been out of work for so long that they fall of the unemployment rolls I don't call it good news.
Seasonal work has also keep the the numbers depressed but that ends in a matter of days I find no comfort in these numbers. HOLD YOUR GOLD!

December 15 2011 at 4:24 PM Report abuse +3 rate up rate down Reply

Of course the numbers are lower, they government isn't counting the people who have lost all extended benefits and have been moved to welfare /assistace. 50% of all households are on food stamps or SNAP now that's a telling reality of where the job market and recovery really is. Just because the media spins it, doesnt make it a true statement.

December 15 2011 at 4:18 PM Report abuse +5 rate up rate down Reply

fudging the numbers NOBAMA GANG.....Lets see after holiday the number ASS -PRESS

December 15 2011 at 2:42 PM Report abuse +4 rate up rate down Reply

And yet there was an article today that said 2/3's of CEO's are NOT planning on hiring in 2012. Another article said that 1/2 of Americans are either in poverty or near poverty. This piece would make you believe thaty evrything is just have to had been working in order to apply for unemployment. Too many people have and continue to fall off the radar. I wonder what the true numbers look like and I don't think they are pretty.

December 15 2011 at 2:21 PM Report abuse +6 rate up rate down Reply
1 reply to Frank's comment

and poverty or near poverty does NOT mean you are just taking handouts. Try living on a minimum wage/no benefit income for one, let alone a family.

December 15 2011 at 2:23 PM Report abuse +5 rate up rate down Reply

what bunch off bull

December 15 2011 at 2:00 PM Report abuse +6 rate up rate down Reply

Lies, damn lies, by Obama's minions. Has total employment gone up under Obama? Nope. More figuring and lying about it, by huf puff post,

December 15 2011 at 1:22 PM Report abuse +1 rate up rate down Reply