Jobless claims fall more than expected

NEW YORK (CNNMoney.com) -- The number of Americans filing first-time claims for unemployment insurance fell last week, the government said Thursday, with a total figure that was below analysts' expectations.

There were 452,000 initial job claims filed in the week ended Dec. 19, down 28,000 from the previous week's unrevised 480,000, the Labor Department said.

A consensus estimate of economists surveyed by Briefing.com expected claims to decline to 470,000.

The 4-week moving average of initial claims totaled 465,250, down 2,750 from the previous week's revised average of 468,000.

"It's encouraging to see the headline number in jobless claims come down, but it doesn't tell the story as much it used to," said Mark Vitner, senior economist at Wells Fargo. "Unemployment claims could be falling because the labor market is strengthening or because the labor market is so bleak that people never got hired and never had the chance to get fired."

Continuing claims: The government said 5,076,000 people filed continuing claims in the week ended Dec. 12, the most recent data available. That's 127,000 down from the preceding week's revised 5,203,000 claims.

The 4-week moving average for ongoing claims fell by 90,000 to 5,233,250 from the previous week's revised 5,323,000.

But the slide may signal that more filers are dropping off those rolls into extended benefits.

Continuing claims reflect people filing each week after their initial claim until the end of their standard benefits, which usually last 26 weeks. The figures do not include those who have moved to state or federal extensions, or people whose benefits have expired.

Congress passed legislation last month to extend federally paid benefits up to 99 weeks, depending on the state, but the law only helps those who exhaust their federal unemployment lifelines by the year's end.

Lawmakers in the House and the Senate recently passed measures to extend the filing deadline through the end of February. The President is expected to sign the legislation soon.

Both chambers initially introduced bills to push the deadline to apply for benefits through 2010 or beyond, but Democratic leaders in the House scaled back the effort in hopes of getting the bill through the Senate more quickly.

State-by-state: Jobless claims in 19 states declined by more than 1,000 for the week ended Dec. 12, the most recent data available.

Claims in North Carolina dropped the most, by 14,374, which a state-supplied comment said was due to fewer layoffs in the textile, construction, service, rubber and plastics and electrical equipment industries.

Claims in Louisiana jumped the most, by 1,123.

Outlook. While jobless claims are trending downward, Vitner says they will need to drop much further to improve the overall picture of the job market.

"A large proportion of the population is already unemployed and has been for a very long time," he said. "The rate of layoffs has slowed, but there hasn't been a pickup in hiring."

While it is normal for the rate of job losses to overwhelm the rate of job creation during a downturn, Vitner says employers have been especially sluggish about adding jobs this recession.

For positive job growth, Vitner said initial claims will have to fall below 350,000.

"We're headed in the right direction, and we'll get there when we see payrolls pick up in the middle of next year," he said.