The labor market showed more progress in the latest initial jobless claims numbers, which fell again, by 3,000 to 420,000. The more-telling four-week moving average declined by another 5,250 to 422,750. That's its lowest level since August 2008.
Economists emphasize the more-telling four-week moving average because it smooths out one-time anomalies.
A Bloomberg survey had expected new claims to total 420,000. The previous week's total was revised 2,000 higher to 423,000. Continuing claims rose slightly, by 22,000 to 4.14 million.
Jobless claims need to drop below 400,000 during the next two quarters to give economists and investors confidence that commercial activity is increasing robustly enough that businesses are willing to start hiring again. Each 10,000 drop in initial claims translates to about 25,000 new jobs created per month.
A year ago, new claims totaled 490,000, the four-week moving average was 481,250 and continuing claims totaled 5.32 million.
More States Had Big Layoffs
Two setbacks in the latest report concerned emergency claims and a rise in states reporting large increases in layoffs. States reported 3.85 million people claiming Emergency Unemployment Compensation (EUC) benefits for the week ending Nov. 27, the latest week for which data are available, an increase of 142,931 from the prior week. A year ago, 4.22 million people claimed EUC benefits.
Also, the pattern of fewer states posting large increases in jobless claims took a breather in the latest report, jumping to five from two: New York, 16,863; North Carolina, 15,276; Pennsylvania, 15,174; Georgia, 15,019; and California, 13,585.
The highest insured unemployment rates for the week ending Nov. 27, the latest week for which data are available, were in Alaska, 6.9%; Oregon, 5.4%; Puerto Rico, 5.0%; Montana, 4.6%, and Wisconsin, 4.6%.
Overall, the latest report provides further evidence of a strengthening U.S. economic expansion. Typically, after a large decline in initial claims, such as last week's tumble, a slight rise occurs the next week. But this time, claims again declined, although modestly. That's more evidence that the period of major layoffs is subsiding.
Given the current pace, claims could drop below 400,000 in the next two months -- something the U.S. hasn't seen since the start of financial crisis in September 2008.