The number of people applying for jobless benefits dropped last week to the lowest level in two-and-a-half-years, new Labor Department data shows.
Claims dipped by a seasonally adjusted 36,000 to 383,000 for the week that ended February 5 —the lowest point since early July 2008, and a far cry from their March 2009 high of 651,000 when the U.S. economy was mired in a deep recession. The four-week moving average—which evens out some of the weekly figures’ volatility and is considered a more accurate reading of major trends—dropped 16,000 to 415,500. Eighteen states and territories reported a rise in unemployment claims, with California posting the largest hike of 12,274. Thirty-five states reported a drop in claims, led by North Carolina, which posted a drop of 11,541.
Today’s data suggests low-to-moderate jobs gains, but that might be exactly what the economy needs at this point to sustain steady growth, said Lonnie Golden, a labor market economist at Penn State Abington. “A lot of people would like to see the job market come roaring back, particularly unemployed people,” he said. “But that volatility is probably not something we need right now so long as we are slowly moving in the right direction.”
Golden says he is heartened by the newest data, since an application drop below 425,000 denotes modest growth. But rates would need to drop beneath 375,000 to indicate a declining unemployment rate, and closer to 300,000 to suggest actual job growth, he said. The unemployment rate fell to 9 percent in January, from 9.4 percent in December and is the lowest level since April 2009. But despite the drop, employers added an almost-negligible 36,000 jobs to their rolls in January—far below the 160,000 jobs gain economists had predicted. Employment market analysts say the jobless rate will likely remain at 9 percent through 2011 before falling to near 8 percent in 2012.
Fourteen million people are currently unemployed—almost twice as many as in December of 2007 when the recession hit. “Until we see a sustained period of stronger job creation, we cannot consider the recovery to be truly established,” said Federal Reserve Chairman Ben Bernanke before the House Budget Committee yesterday.
Meanwhile, Democratic lawmakers are concerned GOP proposals to radically cut spending will derail the delicate economic recovery, and further stifle job prospects.
“Blindly slashing investments in important priorities, as proposed by our Republican House colleagues, will slow down our fragile economic recovery and put more people out of work,” wrote Chris Van Hollen, D-Md., in a letter to House Democrats.
Related Links
Unemployment 101: Who pays for jobless benefits, anyway? (The Christian Science Monitor)
US jobless claims data boosts labor market outlook (Reuters)
New aid for long-term unemployed? (The Orange County Register)
