WASHINGTON The number of Americans seeking unemployment benefits dropped 10,000 last week to a seasonally adjusted 316,000, a sign that workers are in less danger of being laid off.
less volatile four-week average fell 7,500 to 331,750, the Labor
Department said Wednesday. Both the first-time weekly jobless claims and
the average have returned to pre-recession levels.
"This is a very pleasant surprise," said Ian Shepherdson, chief economist with Pantheon Macroeconomics, in a research note. "Last week's drop in claims could have been due to seasonal adjustment problems caused by the Veterans' Day holiday, but it's hard to make that case again this week."
Unemployment benefit applications are a proxy for layoffs. They have fallen in six of the past seven weeks. A
government spokesman said there were no special factors that drove
claims lower but cautioned that it can be difficult to seasonally adjust
in late November because the Thanksgiving holiday occurs at different
times each year. Thanksgiving falls on Thursday, a week later than last
Still, the broader
trend has been encouraging. As layoffs have dwindled, hiring has picked
up. Employers added 204,000 jobs last month, indicating that companies
were undeterred by the 16-day government shutdown. Private businesses
added 212,000 new positions, the most since February. The economy has added an average of 202,000 jobs a month from August through October, up from 146,000 in May through July.
"This report reinforces the message that the effects of the
shutdown-and-debt-limit saga are being shaken off and the recovery in
the labor market is still on track," said Jim O'Sullivan, chief U.S. economist with High Frequency Economics, in a note to clients.
total number Americans claiming unemployment benefits through the first
full week of November was 3.9 million, down from 5.2 million a year
ago. Greater employment
typically boosts income, which helps drive economic growth.
Consumer spending accounts for roughly 70 percent of economic
Despite the improving job market, the
unemployment rate remains high at 7.3 percent. That's well above the 5
percent to 6 percent unemployment rate consistent with healthier job
markets. When unemployment is lower, workers have more flexibility to
Job growth is a
major factor for the Federal Reserve in deciding when to reduce its
economic stimulus. The Fed has been buying $85 billion in bonds each
month to keep long-term interest rates low and encourage borrowing and