Jobless claims show labor market improving

By Msnbc.com staff and wire

New claims for jobless benefits jumped for the first time in four weeks, the government reported Thursday, but the overall trend for the labor market remains positive going into the new year.

The Labor Department said?seasonally adjusted initial claims rose 15,000 to 381,000 in the week that ended Dec. 24, up from a revised 366,000 the prior week.The four-week moving average, considered a more accurate gauge of labor market trends, fell 5,750 to 375,000, however.

Despite the increase in the latest week's data, jobless claims remain below 400,000, a key signpost for economists showing that layoffs have tapered off, although hiring still is lackluster.

"We've seen a pretty strong trend in claims recently. This finally shows they're correcting to a sustainable downtrend," Gennadiy Goldberg, interest-rate strategist at 4CAST, told Reuters.

Hiring has improved in recent months. Employers have added an average of 143,000 net jobs a month from September through November. That's almost double the average for the previous three months.

Next year should be even better. A survey of 36 economists by the Associated Press this month found that they expect the economy will generate an average of about 175,000 jobs per month in 2012.

More small businesses plan to hire than at any time in three years, a trade group said earlier this month. And a separate private-sector survey found more companies are planning to add workers in the first quarter of next year than at any time since 2008.

In November, the unemployment rate fell to 8.6 percent from 9 percent. Still, 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.

The pickup in hiring reflects some modest improvement in the economy. Growth will likely top 3 percent at an annual rate in the final three months of this year, economists expect. That would be better than the 1.8 percent growth in the July-September quarter.

Still, Europe is almost certain to fall into recession because of its financial troubles. And without more jobs and higher incomes, consumers may have to cut back on spending. Both could drag on growth next year.

Congress removed one potential threat last week when it agreed to extend a payroll tax cut and to keep emergency unemployment benefits for two additional months. Both programs were scheduled to expire at the end of this month. Economists worried that ending the tax break and the extended unemployment benefits program would have left Americans with less money to spend.

The Associated Press and Reuters contributed to this report.

CNBC's Rick Santelli analyzes this week's jobless claims, coming in at 381,000 - up 15,000 from last week. Santelli also weighs in on currencies, specifically the euro vs the dollar.

Source: http://bottomline.msnbc.msn.com/_news/2011/12/29/9797222-jobless-claims-show-labor-market-improving

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