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Job market looks better as unemployment claims sink

Associated Press
December 15, 2011
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The outlook for the U.S. job market is finally looking brighter.

Far fewer people are seeking unemployment benefits than just three months ago — a sign that layoffs are falling sharply.

The number of people applying for benefits fell last week to 366,000, the fewest since May 2008. If the number stayed that low consistently, it would likely signal that hiring is strong enough for unemployment rates to fall.

The unemployment rate is now 8.6 percent. The last time applications were this low, the rate was 5.4 percent.

The big question is whether fewer layoffs will translate into robust hiring. It hasn't happened yet, even though job growth has been rising consistently each month.

The four-week average of weekly unemployment applications, which smooths out fluctuations, dropped last week to 387,750. That's the lowest four-week average since July 2008. The four-week average has declined in 10 of the past 12 weeks.

Applications for unemployment benefits are a measure of the pace of layoffs. Job cuts have fallen sharply since the recession, but so far employers are hiring at only a modest pace. When applications fall below 375,000 — consistently — that usually signals that hiring is strong enough to lower the unemployment rate.

The downward trend suggests that companies are cutting fewer workers as the economy picks up. It also comes as Congress is wrangling over whether to extend emergency unemployment benefits, which are set to expire at the end of this year.

Growth may top 3 percent in the final three months of this year, according to many economists. That would be up from 2 percent in the July-September quarter.

Other recent reports suggest the job market is improving a bit. In the past three months, net job gains have averaged 143,000 a month. That compares with an average of 84,000 in the previous three months.

In November, employers added 120,000 jobs, and the unemployment rate fell to 8.6 percent from 9 percent. That was the lowest unemployment rate in 2-1/2 years. But about half that decline occurred because many of the unemployed gave up looking for work. When people stop looking for a job, they're no longer counted as unemployed.

Employers posted fewer jobs in October than in the previous month, the government said Tuesday, though the decline was modest.

Job openings have risen by about 35 percent since the recession officially ended in June 2009. But they're still about 25 percent below pre-recession levels.

About 6.7 million people are receiving unemployment benefits. About 2 million will lose their benefits by mid-February if the emergency program expires.

Lawmakers differ over how long benefits should last. The House passed a Republican bill Tuesday that would renew emergency aid but reduce the maximum duration to 59 weeks from the current 99 weeks.

Democrats want to keep the full 99 weeks. The measure is part of broader legislation in the Democratic-led Senate that would also extend a Social Security tax cut.

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  • Answer
    The only true measure is the amount collected from payroll taxes. By the way, those collections continue to drop every quarter. I know the government lies about everything but I expected more from IBJ. Oh well...
  • Not looking?
    These stories say they no longer count the people who have given up looking for a job: "When people stop looking for a job, they're no longer counted as unemployed."

    My question is how do they know who is or isn't looking for a job? If I was unemployed, I wouldn't be updating the government on whether or not I'm looking for a job, unless it's a requirement of collecting unemployment insurance. Is this just another way of saying they don't count the people whose UI has run out? If that's the case, then it's probably really off, since those people probably start job searching even harder than ever at that point.

    • same ole' thing
      I agree, they don't "look" at the overall number of people who aren't on UNEMPLOYMENT anymore or ones who couldn't get it at all. I'm in Manufacturing Management and have been unemployed since April 2009! I agree ALL GOV'T OFFICIALS should be removed and we put people in there that come from the "real world" who understand what needs to be done to turn us around. GOV'T is the one who let the jobs go overseas. We need to stop supporting other countries and start looking after ourselves that come first! Gov't needs to stop trying to tell other countries how to run and what to do...leave them alone and worry about the US.
    • REALITY
      What statistics do not tell, is how many have gone off of unemployment and are STILL no working. Or how many never went on unemployment and are STILL not working. I have not worked since July of 2010. Quiting a job to double up on full-time college so as to better myself. I am still unemployed. So much for government statistics. When it comes to numbers whoever is using them uses them to their advantage. Looks good, espeically at election time to put out the right message. I believe we need to put all the current politicians out of work and pull their plush benefits and let them live the life of sorrow, despair, disbeif, and the pain of not knowing how they are going to survive in this world without a job. Then we might see change. Until then, well you see where we are headed.

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