Jobless applications at lowest since '08
Job seekers wait to talk with potential employers at a career fair in New York. (Dec. 12, 2011) Credit: AP
The job market is looking a little brighter at the start of the new year.
Weekly unemployment benefit applications have fallen to levels last seen more than three years ago. Holiday sales were solid. Service companies grew a little faster in December. And many small businesses say they plan to add jobs over the next three months.
The mix of private and government data released Thursday sketched a picture of an economy that is slowly strengthening, stoking optimism one day ahead of the government's important read on December job growth.
"Businesses have increased hiring to meet the underlying pickup in [consumer] demand," said Neil Dutta, an economist at Bank of America Merrill Lynch.
Weekly applications for unemployment benefits dropped to a seasonally adjusted 372,000 last week, the Labor Department said. That's 11 percent lower than the same time last year.
The four-week average, which smooths fluctuations, was 373,250 -- the lowest level since June 2008.
When applications drop below 375,000 -- consistently -- they generally signal that hiring is strong enough to reduce the unemployment rate.
U.S. service firms, which employ roughly 90 percent of the workforce, grew a little faster in December, according to the Institute for Supply Management.
And small businesses remain encouraged about their plans to hire over the next three months. The National Federation of Independent Business says the proportion of those firms that expect to add workers is just slightly off from the three-year high hit last month.
Economists surveyed by the Associated Press project that the economy will generate an average of 175,000 jobs per month this year. That would be a step up from average monthly gains of 130,000 last year and 78,000 in 2010.
