Fewest layoffs since ’08 as economy strengthens

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by Daniel Wagner and Martiin Crutsinger
Associated Press Writers

WASHINGTON (AP)—The job market is getting healthier, adding to evidence that the economy is improving as 2011 nears an end.

The number of people seeking unemployment benefits fell last week to its lowest level since April 2008, the government said. The report suggested that layoffs are slowing further and that employers may be ready to hire more aggressively in the new year.

A gauge of future economic activity also rose sharply last month. And the economy is thought to be growing in the current quarter much faster than the 1.8 percent annual rate that the government now estimates for last summer.

“The economy is carrying some clear momentum into 2012,” said economist Joel Naroff of Naroff Economic Advisors. “The consistent decline in the weekly lines at the unemployment offices is pointing to a firming in the labor markets, fewer layoffs, more jobs being added and most importantly, a decline in the unemployment rate.”

First-time applications for unemployment benefits last week fell 4,000 to a seasonally adjusted 364,000, the Labor Department said Thursday. It was the third straight weekly drop. The four-week moving average, a less volatile gauge, fell for the 11th time in 13 weeks. At 380,250, it’s the lowest since June 2008.

Unemployment applications reflect the pace of layoffs. Job cuts have fallen sharply since the recession, though many employers have been slow to hire more freely.

The steady decline in applications shows that the economy is now improving consistently, 2½ years after the Great Recession ended. And it may herald a further decline in the unemployment rate.

The rate, which had hovered near 9 percent since the end of the recession, fell sharply in November from 9 percent to 8.6 percent. The nation has added at least 100,000 net jobs each month from July through November, the first such five-month streak since 2006.

“When you fire fewer people, hiring unquestionably follows,” said Dan Greenhaus, chief global strategist at BTIG LLC.

The Conference Board’s index of leading economic indicators rose strongly in November for the second straight month. The economy is gaining momentum, and the risks of a recession are receding, economists with the business research group said.

The index puts the economy on track to grow at a 4 percent annual rate in the quarter ending this month, according to Ian Shepherdson, chief U.S. economist with High Frequency Economics.

(Follow Daniel Wagner at http://www.twitter.com/wagnerreports.)

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