Is This Labor Department Report a Sign of Recovery?
As the Labor Department reported Thursday, first time claims for unemployment insurance payments fell more than forecast, reaching their lowest level in nine weeks.
For the week ended December 8, applications for jobless benefits decreased by 29,000 claims to 343,000. Last week’s figures show that new claims fell the most since reaching a four-year low for the week of October 6, and provide further evidence that the labor market is improving. Comparatively, economists surveyed by Bloomberg predicted that last week’s claims would fall to 369,000.
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The four-week moving average for new claims also fell to its lowest level since the week of November 3, dropping 27,000 to 381,500, while the number of unemployed continuing to receive benefits fell by 23,000 to 3.2 million in the week ended December 1.
According to the data released by the Labor Department, jobless claims have decreased by 108,000 since superstorm Sandy pushed figures up over the last four weeks.
“The job market is holding up reasonably well,” Moody’s Analytics economist told Bloomberg. But “expectations are tempered somewhat by the uncertainty surrounding the fiscal cliff” of tax increases and budget cuts scheduled to take effect January 1.
To keep the labor market improving and to encourage more hiring among employers, the Federal Reserve announced on Wednesday that it will keep its current quantitative easing policies in place until the unemployment rate falls from its current level of 7.7 percent to 6.5 percent.
“The conditions now prevailing in the job market represent an enormous waste of human and economic potential,” said Federal Reserve Chairman Ben Bernanke in a news conference following the the Fed’s announcement.
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