Applications for Unemployment Benefits Dropping

According to an article in the Washington Post, the number of people applying for unemployment benefits has dropped to its lowest level since April of 2008. This has the ability to lead a downward trend that shows the job market strengthening.

The Labor Department stated that first-time applications for unemployment benefits have fallen to 4,000 leading to a seasonally adjusted 364,000. This is the third straight weekly drop.

Unemployment applications are a measure of the pace of layoffs in the business sector. Since the recession, job cuts have fallen sharply and many employers are slowly starting to hire, if they are at all.

With the numbers showing that there are declining applications for unemployment, it reinforces that the economy is gaining strength. The nation has added at least 100,000 jobs every month from July through November.

If the number of unemployment applications continues to decline, then the number of jobs created each month will rise to 200,000 and the unemployment rate might fall as low as 8 percent before November 2012 elections.

Economic growth is being paired with job market improvement, however, the unemployment applications that are still coming in exceed the number needed to drop the unemployment rate significantly.

There are emergency unemployment benefits available but that are set up to expire at the end of the year. Currently, about 6.7 million people are receiving unemployment benefits and about 2.2 million of them will lose their benefits by mid-February and 3.6 million others will lose theirs by the end of March if Congress doesn’t extend the emergency benefits.