Washington, DC, Dec. 31--New claims for jobless benefits fell last week to the lowest level since President Bush took office in January 2001, a sign that America's businesses are feeling more confident that the economic recovery is genuine.
The Labor Department reported Wednesday that new applications filed for unemployment insurance dropped by a seasonally adjusted 15,000 to 339,000 for the week ending Dec. 27. Last week's drop marked the third week in a row that claims went down and left claims at their lowest level since Jan. 20, 2001--Bush's inauguration day.
The latest snapshot of the labor market suggested that businesses may be feeling less inclined to hand out pink slips to workers as the economy shows signs of gaining traction.
The report was better than economists were expecting. They were forecasting a smaller decline that would have pushed claims down to a level of around 350,000.
Claims have been below 400,000 for 13 consecutive weeks, something economists view as a sign that the fragile labor market may be turning a crucial corner.
The more stable four-week moving average of claims, which smooths out week to week fluctuations, decreased last week by 6,500 to 355,750, the lowest level since Feb. 10, 2001.
New claims hit a high this year of 459,000 in the middle of April and have slowly declined, a development cited by Federal Reserve Chairman Alan Greenspan and other economists who say the pace of layoffs is stabilizing.
The labor market has displayed other signs of improvement in recent months. The nation's unemployment rate currently stands at 5.9 percent--down from a high this summer of 6.4 percent.
