By Christopher S. Rugaber, AP Economics Writer
WASHINGTON (AP) — The number of people applying for unemployment benefits fell sharply last week to the lowest level since July 2008, a hopeful sign that improvement in the job market is accelerating.
The Labor Department said Wednesday that weekly unemployment claims dropped by 34,000 to a seasonally adjusted 407,000 in the week ending Nov. 20. Wall Street analysts expected a much smaller drop.
A Labor Department analyst said weekly claims are volatile during the week between the Veteran's Day and Thanksgiving holidays. A key question is whether claims will remain this low in future weeks, or bounce back.
Still, applications for jobless aid are steadily moving lower. Claims have fallen in four of the past six weeks.
The four-week average, a less volatile measure, dropped for the third straight week to 436,000, the lowest since August 2008. That's a month before the financial crisis intensified with the collapse of Lehman Brothers, worsening the recession.
The improvement can't come fast enough for frustrated jobseekers. Applications for jobless aid need to stay below 425,000 for several weeks to signal that hiring is accelerating, economists say.For the first 10 months of this year, claims mostly fluctuated around 450,000 until they began dropping in late October. They fell steadily last year from a peak of 651,000 in March 2009.
Applications for unemployment benefits, while volatile, are a real-time snapshot of the job market. They are a measure of the level of layoffs and indicate whether companies are hiring.
The number of people continuing to claim unemployment aid fell by 142,000 to 4.18 million, the lowest in two years.
That doesn't include millions of people receiving extended benefits under an emergency program set up by Congress during the recession. Nearly 4.7 million people received extended benefits during the week ending Nov. 6, the latest data available. That's down by more than 260,000 from the previous week.