Fewer people apply for unemployment benefits

Jesse Paloger holds up a sign while standing on Wall Street as he hopes to find a job in New York. Paloger, who has an accounting and economics degree from the University of California, Santa Barbara, has written on the bottom of his sign, "Go-getter from California looking for my shot!" Fewer people applied for unemployment benefits last week, the third drop in the past four weeks and a sign that the job market is slowly improving. (AP Photo/Mark Lennihan)

By CHRISTOPHER S. RUGABER
AP Economics Writer

WASHINGTON (AP) — Fewer people applied for unemployment benefits last week, the third drop in the past four weeks and a sign that the job market is slowly improving.

Weekly claims for jobless aid dipped by 3,000 to a seasonally adjusted 420,000 in the week ending Dec. 11, according to a Labor Department report issued Thursday.

The four-week average of claims, a less-volatile measure, fell for the sixth straight week to 422,750. That’s the lowest level since August 2008, just before the financial crisis intensified with the collapse of Lehman Brothers.

Weekly first-time applications below 425,000 tend to signal modest job growth. But economists say applications would need to dip consistently to 375,000 or below to indicate a significant decline in unemployment. Applications for unemployment benefits peaked during the recession at 651,000 in March 2009.

Claims have been steadily declining in the past two months, raising hopes among economists that layoffs are falling and employers are hiring more workers.

Recent reports suggest the economy is gaining momentum. Factories are producing more, retail sales are rising, and business executives and consumers are increasingly optimistic.

But hiring hasn’t picked up. Earlier this month, the government issued a disappointing jobs report that showed employers added only 39,000 net new jobs in November and the unemployment rate rose to 9.8 percent.

The number of people continuing to receive unemployment benefits rose by 22,000 to 4.14 million, the department said. But that doesn’t include another 4.8 million people receiving extended benefits under an emergency program paid for by the federal government.

The extended aid can last up to 99 weeks in states with high unemployment. That program lapsed Nov. 30 but would be continued through next year as part of a compromise on taxes between President Barack Obama and congressional Republicans.

That compromise measure is currently before the House after being approved by the Senate.

Some companies are still cutting jobs. Yahoo Inc. said Tuesday that it is laying off 600 employees, or 4 percent of its work force.