US jobless claims decreasing...

The lines are now heading down...

Reinforcing the belief that the US economy is recovering comes the news that the number of people filing claims for unemployment benefits has fallen.

According to Bloomberg, jobless claims have dropped by 20,000 since the week ending 31st October to 512,000 - the fewest since January. Meanwhile, the number of those receiving jobless benefits has fallen to the lowest level since March. Economists surveyed by Dow Jones Newswires had expected a decrease of only 5,000 claims.

Government success?

So has this come about from natural growth or because of the stimulus packages provided by the Obama administration. Evidence would seem to suggest the later with the home-buyer tax credit boosting consumer demand, and being one of the main contributors to helping pull the economy out of its worst recession in seven decades.

Speaking to Bloomberg Radio in New York, Ellen Zentner, a senior economist at Bank of Tokyo-Mitsubishi UFJ Ltd, said, "We've been on a pretty solid downward trend of initial jobless claims... but the recovery has taken hold."

Whilst claims are down, productivity is up with 'worker productivity', a measure of employee output per hour, rising by 9.5 percent over the course of the year, far greater than the forecast of economists and the biggest jump in six years.

Whilst this would appear to be excellent news, the figures released don't include the number of Americans receiving extended benefits under federal programs. In those cases, the number of people who've used up their benefits begin to collect extended payments and as such, these figures have climbed by 115,000 to 4.01 million.

Still at a high level

Despite the good news, claims are still at a high level showing the job market still has a long way to go before it fully recovers, but experts are positive about the new figures.

"Over the past two weeks, initial jobless claims were somewhat disappointing," Barclays Capital economist Michelle Meyer said to The Wall Street Journal. "But the four-week moving average has actually still improved."

The last quarter has seen the US economy swell with a growth of 3.5 percent from July to September after 16 straight months of decline. Job layoffs are still continuing but at a lighter pace than at the depth of the recession.

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