The number of new people signing up for unemployment benefits dropped last week, a hopeful sign that the recovery in the jobs market is moving ahead.
The Labor Department reported Thursday that new applications filed for jobless benefits declined by a seasonally adjusted 5,000 to 326,000 for the week ending Dec. 25. That left claims at their lowest level since the week ending Dec. 11.
The newest snapshot of the labor market was better than economists were anticipating. They were expecting claims to rise to around 335,000. Strengthening job creation has been an important task for President Bush. The still-recovering job market has been seized upon by Democrats who contend the president’s economic policies have failed to induce a steady hiring spree by businesses.
Employers added 112,000 jobs in November, down from 303,000 in October. Economists, however, are hoping for an improvement in December’s payrolls and are forecasting the addition of around 175,000 jobs during the month. The jobless rate is expected to hold steady at 5.4 percent. The employment report for December will be released by the government next week.
The Federal Reserve, wanting to keep inflation at bay, boosted short-term interest rates for a fifth time this year on Dec. 14. Fed policy-makers at that meeting struck an encouraging tone about economic activity and said that “labor market conditions continue to improve gradually.”
Thursday’s report also showed that the four-week moving average of claims, which smooths out week-to-week fluctuations, fell by 6,000 last week to 333,500, the lowest level since the week ending Nov. 20.
The number of people continuing to collect jobless benefits, however, rose by 29,000 to 2.76 million for the week ending Dec. 18, the most recent period for which that information is available. Still, looking over the past year, this figure has clearly improved. A year ago, people continuing to draw unemployment benefits stood at 3.32 million.