A Good Sign? Jobless Aid Applications Drop

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The number of people seeking unemployment benefits dropped last week to its lowest level since April, and that has some analysts wondering if it's a sign the job market may be rising from its recent slump.

The Labor Department said Thursday that weekly applications fell 24,000 to a seasonally adjusted 398,000. That's the first time applications have fallen below 400,000 in 16 weeks.

Economists cautioned that the lower level only reflects one week of data and that doesn't necessarily signal a trend.

The drop "is clearly good news," said Joshua Shapiro, an economist at MFR Inc. Still, "we would prefer to see further data before concluding that the earlier downtrend in claims is being re-established."

The number of people receiving benefits dipped to 3.7 million. That number, however, doesn't include the millions of people receiving extended benefits under emergency programs enacted during the recession.

All totaled, 7.65 million people received benefits for the week ending July 9, which is the latest data available.

Many economists are becoming more pessimistic about the second half of this year, with many expecting the economy to grow only 2.5 percent. The economy would need to grow 5 percent for a whole year to bring down the unemployment rate by one percentage point.

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