December 31, 2010 in Business

Declining jobless rolls good sign in economy

Benefits applications lowest since July ’08
 

WASHINGTON – Far fewer people are applying for unemployment benefits as the year ends, raising hopes for a healthier job market in 2011.

Applications are at their lowest level since July 2008, the Labor Department says. They fell to 388,000 in the week ending Dec. 25, bringing the four-week average to 414,000. Until mid-October, the four-week average had been stuck above 450,000 most of the year.

Economists say the number of people applying for unemployment benefits predicts where the job market will go over the next few months – so much so that they use this data to help forecast economic growth.

The good news is that layoffs have fallen back to pre-recession levels. In October, 1.7 million people were laid off or fired – the lowest figure since August 2006, more than a year before the Great Recession started. Layoffs and dismissals peaked at 2.6 million in January 2009.

In other economic news Thursday:

• The number of people who signed contracts to buy homes rose in November, the fourth increase since hitting a low in June. The National Association of Realtors says its index of sales agreements for previously occupied homes increased 3.5 percent last month from a downwardly revised reading in October.

• The average rate on 30-year fixed mortgages rose to 4.86 percent from 4.81 percent in the previous week, Freddie Mac said. The rate on 15-year fixed loans rose to 4.20 percent from 4.15 percent. The rate on 15-year fixed loans rose to 4.20 percent from 4.15 percent.

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