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Jobless claims drop
New weekly claims for unemployment benefits lower than expected, government reports.
December 31, 2003: 1:44 PM EST

NEW YORK (CNN/Money) - New jobless claims fell to the lowest level in nearly three years in the United States last week, the government said Wednesday, coming in lower than Wall Street forecasts.

The Labor Department said 339,000 people filed new claims for state unemployment benefits in the week ended Dec. 27, compared with a revised reading of 354,000 the prior week. Economists, on average, expected 350,000 new claims, according to

It was the lowest level for jobless claims since the week of Jan. 20, 2001, before the last recession, which began in March 2001.

The four-week moving average of new claims, which irons out the volatility of the weekly data, fell to 355,750 from a revised 362,250 the prior week. It was the lowest level for the four-week moving average since the week of Feb. 10, 2001.

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But continued claims, the number of people out of work for a week or more, jumped to 3.31 million for the week ended Dec. 20, the latest data available, from a revised 3.23 million the prior week.

Stock prices showed little reaction and were mixed on Wall Street. Treasury bond prices were little changed.

Though the unemployment rate has fallen to 5.9 percent from its mid-summer peak of 6.4 percent, payrolls outside the farm sector are still 2.4 million jobs smaller than they were in February 2001, marking the longest such stretch of payroll pain since World War II.

Tax-rebate checks, along with the proceeds of a wave of late-summer cash-out mortgage refinancing, helped push gross domestic product (GDP), the broadest measure of the economy, to an 8.2 percent annualized growth rate in the third quarter, the best in nearly 20 years.

Economists hope the third quarter's growth will kick the economy into higher gear in future quarters, creating more jobs and accelerating wage and salary growth to support the economy in the longer term.

Recent jobless claims reports have helped support this view, but consumers are not yet convinced -- December sentiment surveys have shown lingering anxiety about the job market.  Top of page

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