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January 5, 2012 9:28 AM EST
The number of Americans filing for first-time unemployment benefits resumed its downward trend last week after an uptick in the week ended Dec. 24. But the figure remained below a key threshold for gauging the job market, a sign that the labor market is gaining strength.
The Labor Department said new claims in the week ended Dec. 31 decreased by 15,000 to 372,000. Jobless claims have registered below the key 400,000 mark -- a level historically associated with an improving labor market -- in eight of the past nine weeks. Economists polled by Reuters called for a decrease of 6,000.
Thursday's data showed the four-week moving average, considered a less volatile measure of the labor market trends, came in at 373,250, a decrease of 3,250 from the previous week's revised average of 376,500, and the lowest level in more than three years.
Continuing claims -- which include people filing for the second week of benefits or more -- fell by 22,000, to 3,595,000 in the week ended Dec. 24.
The continuing claims figure does not include the number of Americans receiving extended benefits under federal programs.
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The 4-week moving average was 3,601,750, a decrease of 1,000 from the preceding week's revised average of 3,602,750.
Some Bad News
Greater attention is being paid to unemployment figures due to this year's presidential election, especially since no U.S. president since Franklin Delano Roosevelt has won a second term when unemployment on Election Day topped 7.2 percent.
Not all has been bad news: the unemployment rate dropped to 8.6 percent in November and Thursday's jobless claims came in positive.
Ahead of Friday's closely watched unemployment rate report, two key trends have emerged from labor market data.
1. A lower labor participation rate (Chart)
The unemployment rate, the normal mechanism for understanding the percentage of workers who want to work but can't find work, is telling us less and less each month.
When the recession officially started in December 2007, the labor participation rate was at 66 percent and the unemployment rate was at 5 percent.
By the time the recession officially ended in June 2009, the labor participation rate dropped to 65.7 percent. The unemployment rate at that time spiked to a high of 9.5 percent (the peak came four months later and registered at 10.1 percent).
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