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Jobless claims at lowest level since early 2008

WASHINGTON — In the latest sign that the economy is surging at year's end, unemployment claims have dropped to the lowest level since April 2008, long before anyone realized that the nation was in a recession.

Claims fell by 4,000 last week to 364,000, the Labor Department said Thursday. It was the third straight weekly drop.

The four-week average of claims, a less volatile gauge, fell for the 11th time in 13 weeks and stands at the lowest level since June 2008.

While the economy remains vulnerable to threats, particularly a recession in Europe, the steady improvement in the job market is heartening.

"The underlying trend is undeniably positive," said Jennifer Lee, senior economist with BMO Capital Markets. "I think everyone is starting to come around to the view that, yes, there is a recovery going on."

Claims peaked at 659,000 in March 2009. In the four years before the Great Recession, they mostly stayed between 300,000 and 350,000. That claims are edging closer to that range is a sign that the layoffs of the past three years have all but stopped.

"We haven't yet really seen substantial numbers of new jobs, but this is definitely an encouraging sign of what lies down the road," said Sam Bullard, an economist at Wells Fargo.

The steady decline may also herald a further decline in the unemployment rate, which fell in November to 8.6 percent from 9 percent the month before. The December rate will be announced Jan. 6.

Economists will also watch closely on Jan. 6 to find out how many jobs were added this month. At least 100,000 jobs have been added each month from July through November, the best five-month streak since 2006.

"When you fire fewer people, hiring unquestionably follows," said Dan Greenhaus, chief global strategist at BTIG LLC, a boutique brokerage.

He expects employers to create as many as 200,000 jobs per month if the trend continues.

GDP revised lower

The U.S. economy grew more slowly in the summer than previously thought because consumers spent less than the government had first estimated. The Commerce Department says the economy grew at an annual rate of 1.8 percent in the July-September quarter. That was the fastest growth this year, up from 1.3 percent in the April-June quarter. But it was down slightly from last month's estimate that the economy was expanding at a 2 percent rate in the summer. On a brighter note, economists think the economy is growing at an annual rate of more than 3 percent in the final three months of this year.

Jobless claims at lowest level since early 2008 12/22/11 [Last modified: Thursday, December 22, 2011 8:16pm]
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