Latest Unemployment Numbers Show Job Market Strengthening

By: AP Email
By: AP Email

WASHINGTON (AP) - The number of people seeking unemployment
benefits plummeted last week to 352,000, the fewest since April
2008. The decline added to evidence that the job market is
strengthening.

Applications fell 50,000, the biggest drop in the seasonally
adjusted figure in more than six years, the Labor Department said
Thursday. The four-week average, which smooths out fluctuations,
dropped to 379,000. That's the second-lowest such figure in more
than three years.

A department spokesman cautioned that volatility at this time of
year is common. Applications had jumped two weeks ago, largely
because companies laid off thousands of temporary workers hired for
the holidays.

Still, when weekly applications fall consistently below 375,000,
it usually signals that hiring is strong enough to push down the
unemployment rate.

"This continues a clear downshift in claims," said Ian
Shepherdson, an economist at High Frequency Economics.

Shepherdson suggested that stronger hiring should follow.

Hiring improved in the second half of 2011. In December,
employers added 200,000 jobs. That marked the sixth straight month
in which the economy added at least 100,000 jobs. And the
unemployment rate fell to 8.5 percent, a three-year low.

For all of 2011, the economy added 1.6 million jobs. That was up
sharply from 940,000 in 2010. Economists say they expect roughly
1.9 million more jobs to be added this year, according to a survey
by The Associated Press.

Still, the job market has a long way to go before it fully
recovers from the damage of the Great Recession, which wiped out
8.7 million jobs. More than 13 million people remain unemployed.
Millions more have given up looking for work and so are no longer
counted as unemployed.

The overall number of people receiving benefits, which isn't
seasonally adjusted, rose. More than 7.8 million people received
benefits in the final week of last year. They include about 3.6
million people covered by extended-benefit programs begun during
the recession.

The manufacturing sector remains a bright spot. Factory output
jumped 0.9 percent in December, the Federal Reserve said this week.
That was the sharpest monthly gain in a year. Manufacturing gained
225,000 jobs last year, the most since 1997.

The pickup in hiring reflects stronger economic growth. The
economy likely grew at an annual rate of about 3 percent in the
final three months of last year, economists estimate.

That would be a sharp improvement over the 1.8 percent annual
growth rate in the July-September quarter. Rising consumer spending
is thought to be fueling much of the gain in the current quarter.

Even so, economists worry that growth could slow in the first
half of 2012. Europe is almost certain to fall into recession
because of its financial troubles.

And wages aren't keeping up with inflation. The department said
in a separate report that average inflation-adjusted hourly
earnings dropped 0.9 percent last year.

Without more jobs and higher pay, consumers might have to cut
back on spending. That would weigh down growth next year. Consumer spending accounts for about 70 percent of the economy.


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