WASHINGTON (AP) — The number of people applying for unemployment benefits fell sharply last week. þþThe Labor Department said applications dropped by 34,000 to 388,000, the lowest number since the week of July 12, 2008. The level of applications has either fallen or remained unchanged in five of the past six weeks. þþUnemployment applications below 425,000 signal modest job growth. But economists say applications need to fall to 375,000 or below to indicate a significant decline in unemployment. Applications for unemployment benefits peaked during the recession at 651,000 in March 2009. þþThe level of applications for unemployment insurance can be particularly volatile during the holidays. But a department analyst said there were no unusual factors affecting the report. þþApplications are a real-time snapshot of the job market, reflecting the pace of layoffs. If they continue to move down, hiring is more likely to pick up. þþThe four-week average, a less-volatile measure, dropped by 12,500 to 414,000 in the week that ended on Saturday. That was the lowest level since late July 2008. þþFor most of the year, applications hovered around 450,000 before dropping below that number in November. The four-week average has fallen by more than 40,000 in the last two months — an indication that hiring could accelerate. þþEmployers added 39,000 jobs in November, the Labor Department said earlier this month, and the unemployment rose to 9.8 percent. Most economists expect the December jobs report, to be released next week, will show larger job gains. þþThe total number of people receiving unemployment benefits rose in the week ended Dec. 18 to 4.13 million. þþThat does not include millions of unemployed workers receiving extended benefits under an emergency program set up during the recession. About 4.5 million people are receiving extended benefits for up to 99 weeks. All told, nearly 8.9 million people obtained unemployment benefits in the week ended Dec. 11, the latest data available. þþIn another report, the number of people who signed contracts to buy homes rose in November, the fourth increase since contract signings hit a low in June. þþThe National Association of Realtors said its index of sales agreements for previously occupied homes increased 3.5 percent last month from a downwardly revised reading in October. Contract signings were up in the West and Northeast but down in the South and Midwest. þþThe signings index is 22.1 percent above June’s reading, which was the lowest level since the private group began tracking the data in 2001. Still, signings are 5 percent lower than November 2009 when buyers were scrambling to close purchases to qualify for the first federal tax credit; 2010 is shaping up to be the worst for home sales since 1997. þþIn other housing news, the average rate on 30-year fixed mortgages rose this week to the highest level in seven months, reflecting higher yields on long-term Treasuries. þþThe mortgage giant, Freddie Mac, said that the rate increased to 4.86 percent from 4.81 percent in the previous week. It hit a 40-year low of 4.17 percent last month. þþThe average rate on the 15-year loan rose to 4.20 percent from 4.15 percent — the highest reading in six months. It fell to 3.57 percent in November, the lowest level on records starting in 1991. þþRates have been rising since November as investors shift money out of Treasuries and into stocks. Many expect the tax-cut plan will fuel economic growth and increase inflation. Yields tend to rise on fears of inflation. Mortgage rates track the yields on the 10-year Treasury note. þþ
Source: NY Times
