Claims for Jobless Benefits Fall

Far fewer people are seeking new unemployment benefits than just three months ago, the Labor Department said Thursday.

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 could signal that hiring is strong enough to lower unemployment, analysts say.

The unemployment rate in November was 8.6 percent. The last time jobless applications were this low, the rate was 5.4 percent.

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

Applications for unemployment benefits are a measure of the pace of layoffs. Job cuts have fallen sharply since the recession. Employers have been hiring at only a modest pace. But when applications fall below 375,000 consistently, that usually signals that hiring is strong enough to lower the unemployment rate.

The downward trend comes as Congress is wrangling over whether to extend emergency unemployment benefits, which are set to expire at the end of this year.

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 2 and a half 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.

About 6.7 million people are receiving unemployment benefits. 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.

Article source: http://feeds.nytimes.com/click.phdo?i=10a98f56e27a56476bc558bbdeff97af