The Labor Department reported on Thursday that initial jobless claims fell 22,000 to a seasonally adjusted 432,000 in the week ended Dec. 26 - the lowest level since July 2008. Just nine months ago, claims peaked at 674,000.
Economists surveyed by MarketWatch expected initial claims to rise slightly to 455,000. The level of initial claims in the week ended Dec. 19 was revised up by 2,000 to 454,000. See Economic Calendar.
The four-week average of initial claims dropped 5,500 to 460,250, the lowest since September 2008. The four-week average smoothes out seasonal quirks.
Although the end of the year is especially volatile because of one-time factors such as holidays and bad weather, a Labor official said the latest data did not reflect any unusual events.
The number of continuing claims, which reflects people who have been collecting state benefits for an extended period, dipped 57,000 to 4.98 million in the week ended Dec. 19. The four-week average of continuing claims dropped 122,000 to 5.22 million, the lowest rate since late February.
The steady decline in continuing claims over the past few months suggests companies are no longer getting rid of workers and may even be hiring. Yet the U.S. unemployment rate stands at 10%, and few economists expect it to decline quickly even if a recovery gains steam in early 2010.
Companies typically ask employees to work longer hours before they start filling new positions. Until demand for goods and services accelerates, firms are likely to remain cautious about hiring.
Another gauge of employment trends will become available on Jan 8 when the federal government releases payroll data for December. The U.S. unemployment rate hit 10.2% in October, the highest rate since the winter of 1982. It fell to 10% in November.
In the week ended Dec. 12, meanwhile, the number of people claiming benefits of any kind -- state or federal -- totaled 10.2 million, not seasonally adjusted. That was up from 10 million in the previous week.
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