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2.7%  Q1 GDP    4.57%  avg. 30-year mortgage     9.5%  Unemployment

New weekly jobless claims fall by 21,000, an eight-week low

UPDATED at 12:21 p.m. with impact of automakers:

The number of new jobless claims filed last week dropped by 21,000 to 454,000, the lowest number in eight weeks.

Even more promising, the number of continuing claims dropped by 224,000 to 4.4 million.

The four-week moving average of new unemployment claims, which smooths out week-to-week volatility, dropped by 1,250 to 466,000.

Note, however, that this is just a first pass at these data. We'll take a closer look at the context later today to try to figure out whether the raw numbers are as encouraging as they look or whether there are reasons for the drop in new claims that may speak to larger economic problems.

UPDATE: One of the reasons that fewer people applied for unemployment last week was U.S. automakers. The Big Three are not shutting down production as much as they typically do in July. So those workers are still in jobs.

Economists say that the economy cannot start meaningful new job creation until the number of new weekly jobless claims gets down into the low 400,000s and stays there. The weekly number has refused to budge past the mid-400s,000s.

The national unemployment rate in June was 9.5 percent. The number is down from 9.7 percent the previous month, but mostly because so many people left the labor force, not necessarily because more people got jobs.

We'll see how the markets respond to the jobs data when they open in less than an hour and find out whether Wall Street can put together a three-day rally.

By Frank Ahrens  |  July 8, 2010; 12:21 PM ET
Categories:  Data  
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Comments

Let's see, Congress dropped 1.3 million people from the unemployment rolls by simply cutting off their unemployment compensation and the "official" statistics, then, claim a 21,000 "drop" total????? That says to me that unemployment climbed dramatically in June.

Posted by: mibrooks27 | July 8, 2010 12:24 PM | Report abuse

YOu said right mibrooks27 - I have been unemployed for over two years and finding it impossiblel to get rehired due to my age which is over 65. Sorry to all the rest of you who think I can make it on Soc Sec. Impossible! I not only WANT to work, I have to work or lose my house and everything else. Had gotten a huge raise and very large bonus, highest ever, just one week to the day prior to RIF. Could not have seen that one coming.

Posted by: nana1ellen | July 8, 2010 12:33 PM | Report abuse

These numbers are about as bogus as all get out and I wish I knew where they came from as clearly, they can't be counting all of the folks who have been out of work for an extended period of time and/or who no longer qualify for unemployment benefits. So much is being made about the government's potential extension of jobless benefits and our inability to pay for it. People, employers pay this tax to the government for each employee and paid this tax for all of the folks who have gotten riffed in the past 18 months. Like social security, even when benefits are extended such as they are now, they are funded by the unemployment insurance premiums being paid on current employees. Like the age old story of the lack of a salt budget in winter, did the government just spend the money on something else, leaving the unemployed without?

Posted by: sassafrasnewport | July 11, 2010 8:18 PM | Report abuse

These numbers are about as bogus as all get out and I wish I knew where they came from as clearly, they can't be counting all of the folks who have been out of work for an extended period of time and/or who no longer qualify for unemployment benefits. So much is being made about the government's potential extension of jobless benefits and our inability to pay for it. People, employers pay this tax to the government for each employee and paid this tax for all of the folks who have gotten riffed in the past 18 months. Like social security, even when benefits are extended such as they are now, they are funded by the unemployment insurance premiums being paid on current employees. Like the age old story of the lack of a salt budget in winter, did the government just spend the money on something else, leaving the unemployed without the insurance paid on their behalf?

Posted by: sassafrasnewport | July 11, 2010 8:19 PM | Report abuse

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