Initial Jobless Claims Fall Far Below Critical Psychological Level

New claims for unemployment benefits declined last week as the labor market continued to stage a recovery that could protect the U.S. economy from the European sovereign debt crisis now threatening another widespread recession.

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Initial claims for state unemployment benefits fell by 15,000 in the final week of 2011 to a seasonally adjusted 372,000, the Labor Department reported on Thursday, though the previous week’s claims data was upwardly revised to 387,000 from a previously reported 381,000.

The Labor Department said there was nothing unusual about the data, but that figures for three states, including California and Virginia, had to be estimated because of the public holiday on Monday. Claims for seven states, again including California and Virginia, had to be estimated when first compiling the previous week’s data as well.

Claims have now declined for four of the last five weeks, and have remained below the 400,000 mark said to be the tipping point below which the economy is thought to be adding jobs. The four-week moving average, considered a better measure of employment trends, fell another 3,250 last week to 376,500 — the lowest since June 2008.

In the week ended December 24, when initial jobless claims fell to 387,000, the number of people still receiving benefits under regular state programs after an initial week of aid fell by 22,000 to 3.595 million. As of December 17, a total of 7.223 million Americans were claiming unemployment benefits across all benefit programs, down 8,311 from the previous week.

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