Unemployment claims fall again

NEW YORK (CNNMoney.com) -- In another hopeful sign for the job market, the number of Americans filing for their first week of unemployment benefits unexpectedly fell for the third week in a row.

The number of initial claims dropped to 420,000 in the week ending Dec. 18, down from 423,000 claims the previous week, the Labor Department said Thursday. Economists surveyed by Briefing.com were expecting a tick up to 424,000 new claims.

The 4-week moving average of initial claims -- a number that tries to smooth out week-to-week volatility -- was 426,000, an increase of 2,500 from the previous week's average of 423,500.

The moving average was higher because the mathematic formula used to calculate it covers a period of several weeks, explained Robert Brusca, chief economist at Fact and Opinion Economics, but the overall trend is a positive one.

"The good news is that claims are clearly hovering at a lower level than they have been," said Brusca. "This is a move into a better territory -- it is a good move."

That average has been stuck between 400,000 and 500,000 for over a year. During the last few weeks, the average has been moving toward the lower end of that range, but most economists say it still needs to fall below 400,000 to make a dent in the unemployment rate.

"Once we break 400, people are going to start being a little bit more optimistic that the economy is in better shape, and we are getting close enough that we could do that pretty soon if we continue to make this progress," said Brusca.

The government said 4,064,000 people filed unemployment claims for their second week or more, during the week ended Dec. 11, the most recent data available. That's down by 103,000 from the week before.

Economists were expecting 4,075,000 people to file ongoing claims.

The 4-week moving average for continuing claims fell by 38,250 to 4,155,500.

Continuing claims reflect people who file 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 who have exhausted their benefits but are still out of a job.