More "good" news on unemployment

The total number of unemployed drawing benefits is still at an all-time high, but the number of new applications is continuing to drop.

Published May 7, 2009 1:53PM (EDT)

Another piece of evidence suggesting that the U.S. economy is poised for some kind of recovery: On Thursday, the Labor Department reported that initial jobless claims for the week ended May 2 fell by 34,000.

That's a much bigger drop than economists expected, it's the fourth decline in the last five weeks, and it's the lowest level in three months. The drop also provides strong support for arguing that we have moved past the peak in jobless claims for this cycle, which, as noted last week, correlates well, historically, with the end of recessions.

Combined with an unexpectedly low number of job losses in Wednesday's ADP private sector report for April, the claims figures are unambiguously the best news on employment the U.S. economy has witnessed in many months.

However, Friday's government report on April unemployment is still likely to announce another half million or so jobs lost, so we're hardly out of the woods.

By Andrew Leonard

Andrew Leonard is a staff writer at Salon. On Twitter, @koxinga21.

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