WASHINGTON - Fewer people applied for unemployment benefits last week than in any week since July, a hopeful sign that the job market is improving.
Still, economists cautioned that the trend would have to continue for several more weeks before a solid conclusion could be drawn that hiring is picking up.
Applications for jobless benefits dropped by 21,000 to a seasonally adjusted 434,000 in the week ended Oct. 23, the Labor Department said yesterday.
It was the second-lowest number for first-time claims this year. The only time it was lower was during the July 10 week, and that week was affected by the Independence Day holiday when state unemployment offices were closed.
Unemployment claims have fluctuated around 450,000 for most of this year and have fallen below that level seven times. But they have always rebounded in subsequent weeks and haven't remained below 450,000 for longer than two weeks.
The decline in claims partly reflects a drop in layoffs in the construction sector, said Julia Coronado, an economist at BNP Paribas. That sector had seen elevated layoffs in August. But if fewer layoffs in construction are a reason claims are down, it means hiring may not be picking up much elsewhere in the economy, Coronado said.
New York was among the states recording the largest drop in claims, which the government said were down by 6,382 due to fewer layoffs in construction and services.