Weekly unemployment claims fell to a seasonally adjusted 352,000 last week, the lowest level since April 2008, a sign that the country’s job situation could be improving.
Stephen Bronars, chief economist with Welch Consulting, called it a “good number,” although weekly jobless claims are volatile this time of year because of post-holiday layoffs and the Martin Luther King Jr. holiday. The Department of Labor relies on reports from state agencies, and because many field offices were closed Monday, Thursday’s report is an estimate.
Until a few more weeks of data continue to signal improvement, “we should not overreact to one week of good news,” Bronars said.
“After years of downsizing and job losses, there were fewer layoffs in 2011 than any year in the past decade,” he said. ”So its actually surprising that jobless claims are as high as they have been.”
In 2007, right before the recession, weekly jobless claims averaged 320,000 per week.
For the week ending Jan. 14, the Labor Department reported weekly applications for unemployment benefits decreased by 50,000, the biggest drop in more than six years. The previous week’s figure was revised up to 402,000 from 399,000.
The four-week average, which smooths out fluctuations, dropped to 379,000, the second lowest level in more than three years, the Associated Press reported.
“The key to a job market recovery is more hiring, especially in start-ups,” Bronars said. “Unfortunately, the new jobless claims report tells us little about the pace of hiring. Other surveys indicate that hiring and job creation is still behind what we have seen in previous recoveries.”
Thursday’s report follows the December jobs report released earlier this month, which showed the unemployment rate had fallen to 8.5 percent, the lowest since February 2009. The U.S. economy added 200,000 jobs last month, which was better than expected.
The unemployment rate, which has fallen for four straight months, has decreased in part because the labor force has barely grown in the past year.
States reported that 3,026,855 people claimed Emergency Unemployment Compensation benefits for the week ending Dec. 31, an increase of 100,179 from the pervious week.
Congress and the president authorized a two-month extension of federal EUC benefits as of Dec. 23, which extends unemployment beyond the standard 26 weeks in most states.
The Labor Department reported the highest insured unemployment rates in the week ending Dec. 31 were in:
1. Alaska, 6.9 percent
2. Connecticut, 6.6 percent
3. Oregon, 5 percent
4. Wisconsin, 4.9 percent
5. Pennsylvania, 4.7 percent
6. Idaho, 4.5 percent
7. Rhode Island, 4.5 percent
8. Montana, 4.3 percent
9. New Jersey, 4.2 percent
10. Arkansas, 4 percent
11. Illinois, 4 percent
12. Washington, 4 percent