Compiled By CityTownInfo.com Staff
December 31, 2009
Unemployment benefit claims fell last week to their lowest level in nearly 18 months, signaling what many hope will turn into sustained economic growth.
The Labor Department announced today that initial unemployment benefit claims fell by 22,000 to 432,000 during the week ended December 26. The figure is the lowest since July 19, 2008, when 413,000 claims were filed.
"We've seen a very steady decline in claims, consistent with conditions improving in the overall labor market," said Zach Pandl, an economist at Nomura Securities International Inc. in New York, who was quoted by Business Week. "You can't really have a recovery in the economy unless you have a better job market."
Other economists were cautiously optimistic. "It's encouraging to see that we're continuing to move in the right direction toward 400,000 claims," said Tim Quinlan, an economic analyst at Wells Fargo, who was quoted by CNNMoney.com. "We're certainly off the highs we saw earlier this year." He noted, however, that claims would need to drop to near 350,000 for positive job growth.
The number of continuing claims fell as well: The Labor Department reported that 4,981,000 people filed continuing claims in the week ended December 19, down 57,000 from the week before. In addition, the four-week average of continuing claims fell 122,500 to 5,101,250.
The number of jobless claims varied by state. In 10 states, claims fell by more than 1,000 for the week ended December 19, with Tennessee claims dropping the most by nearly 3,000. But in 12 states, jobless claims rose by more than 1,000.
The gradual decline in continuing claims suggest that companies are laying off less workers and may even be hiring. But economists cautioned that unemployment claims can be misleading during holiday time. "While an underlying downtrend is clearly in place," said Joshua Shapiro, an economist at New York-based MFR Inc. who was quoted in The Wall Street Journal, "it is being exaggerated now by seasonal adjustment difficulties, which will continue over the very near term before reversing in impetus in roughly three weeks."