Jobless Claims Drop 15,000, Stay on Downward Trek

Unemployment benefit applications dropped to 358,000, the second-lowest level in nearly four years, according to a government report Thursday.

AP

The move represented a drop of 15,000 from the previous week's total.

Claims have been a fairly steady trend lower, reflected last week in the Labor Department's announcement that the national unemployment rate dropped to 8.3 percent in January on the strength of 243,000 new jobs created.

The four-week average, a less volatile measure, fell to 366,250, the lowest since late April 2008.

When applications fall consistently below 375,000, it usually  signals that hiring is strong enough to lower the unemployment rate .

From November through January, the economy has added an average of 201,000 net jobs per month.

The increased hiring in part reflects faster economic growth.

The economy expanded at an annual rate of 2.8 percent in the final three months of last year — a full percentage point higher than the previous quarter.

Most economists expect growth will slow a bit in the current quarter, because companies won't need to rebuild their stockpiles of goods as much as they did in the winter.

But some economists are increasingly optimistic that the economy will steadily expand this year, given last month's unexpectedly large job gains and other positive signs.

U.S. manufacturing activity grew in January at the fastest pace in seven months. Americans are buying more cars and trucks. And consumers stepped up borrowing in November and December by the most in a decade, which could indicate they are growing more confident in the economy.

Still, the job market has a long way to go before it fully recovers from the damage of the Great Recession. Nearly 13 million people remain unemployed, and 8.3 percent unemployment is painfully high.

One reason the unemployment rate has fallen for five straight months is that many people have stopped looking for work. The government only counts people as unemployed if they are actively searching for a job.