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Unemployment claims drop to lowest level in more than a year

A Labor Department report on unemployment claims is better than economists had predicted. But analysts say it’s likely to be several months before the economy starts adding jobs.

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Former high school teacher Nick Ayrom, from Glendale, Calif., looks for technology related jobs on a computer terminal at the Verdugo Job Center. The number of newly laid-off workers filing claims for unemployment benefits dropped unexpectedly last week, a sign the job market is healing as the economy slowly recovers.

Damian Dovarganes/AP

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A closely watched barometer of America’s job market – the number of weekly unemployment claims – fell to its lowest level since the collapse of Lehman Brothers, whose failure deepened the financial crisis more than a year ago.

New jobless claims declined to 432,000, the Labor Department said. The news was better than economists had predicted, and confirms a trend of improvement in recent weeks that suggests that recession-related job losses are winding down. But many forecasters still see weakness ahead for several months before the economy starts adding jobs.

During good times, weekly jobless claims typically run at a pace of about 300,000. During the early part of this year, the initial-claims pace was running above 600,000.

'Another welcome improvement'

Andrew Tilton, an economist at the investment firm Goldman Sachs, said the report was “another welcome improvement in jobless claims to close out the year, with new claims setting a post-Lehman low.”

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