Jobless Claims Drop Unexpectedly

This is the fourth drop in new jobless claims in five weeks. However, the problem is not just the bew jobless claims. Rather, an additional issue is the reluctance of employers to hire new workers. The unemployment rate is expected to keep climbing well into 2010, surpassing 10 percent.

The Labor Department said that new claims for unemployment insurance dropped last week to a seasonally adjusted 521,000. This is down from 554,000 the previous week, and better than analysts expected.

The four-week moving average, which smooths out fluctuations, fell to 539,750. This is the lowest number since Jan. 17. The number of people continuing to claim benefits declined by 72,000 to 6.04 million. Analysts expected continuing claims to rise slightly.

It should be noted, however, that there is a high probability that some of the drop in continuing unemployment numbers is due to the fact that some people have dropped off the rolls as their jobless benefits expired, while others are now "underemployed."

While this is an improvement, initial claims remain well above the 325,000 that economists say is consistent with a healthy economy.

You can read some of our prior unemployment stories below:

New Jobless Claims Decline by 12000
New Jobless Claims Drop for Third Straight Week
Unemployment Rate Rises to 9.8%