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First-time jobless claims fall sharply to 381,000

December 9, 2011

The Labor Department said claims fell to a seasonally adjusted 381,000 last week. The level of initial claims in the week ended Nov. 26 was revised up by 2,000 to 404,000.

A Labor Department official said that seasonal adjustment factors were at play in the large decline. The models had expected a larger increase than actually took place.

The four-week average of new claims also fell, down 3,000 to 393,250. This is the lowest level since early April. The monthly average is seen as a more accurate gauge of labor trends because it reduces volatility in the week-to-week data.

Economists generally believe it’s a sign of faster job creation and stronger economic growth when claims fall below the 400,000 threshold. Although the claims data directly reflects people who lose their jobs, the number of claims declines when hiring outpaces layoffs.

Since late April claims have gradually fallen from a 2011 high of 478,000 to around the 400,000 mark.

 

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