Claims for unemployment benefits declined last week, U.S. Labor Department says

Claims for unemployment benefits declined last week, U.S. Labor Department says

Unemployment benefit claims have dropped more than expected last week according to the latest weekly report released by the Labor Department. For the week ended December 4, jobless claims dropped by 17,000 to 421,000. The claims forecast was between 436,000 and 438,000 and a dip of 13,000. In another sign that the job market is on its way to recovery, the four-week moving average declined for the fifth consecutive week. It shed 4,000 to settle at 427,000 -- its lowest since August 2, 2008 -- compared to the previous week's average of 431,500.

The news of the reduction in unemployment claims comes on the heels of the unemployment report released by the Labor Department which showed that the unemployment rate rose to 9.8 percent. Just 39,000 new jobs were added, leaving millions of Americans still unemployed. The weak labor scenario is not following the headway made by the manufacturing sector. The high numbers of jobless Americans are making others hesitant to spend large amounts of money, particularly on new homes. Credit card use sank for the 26th succesive time in October according to the Federal Reserve. Consumer spending remains at a conservative level, hindering expansion.

The Labor Department report also showed that continuing claims dropped by 191,000 to 4,086,000 from 4,277,000 week-by-week.  The U.S. unemployment rate for those with unemployment insurance for the week through November 27 decreased 0.2 points from the prior week's 3.4 percent to 3.2 percent -- the lowest since mark since November 22, 2008. Texas had the largest decline in unemployment benefit claims.

Posted by James Fried on Friday December 10 2010, 1:29 AM EST. Ref: Wall Street Journal. All trademarks acknowledged. Filed under Featured News, Finance. Comments and Trackbacks closed. Follow responses: RSS 2.0