Initial Jobless Claims Fall 17,000

Initial jobless claims fell by 17,000 for the week ended Dec. 4 according to a report from the U.S. Department of Labor.
By Shanthi Bharatwaj ,

NEW YORK (

TheStreet

) -- The number of Americans filing unemployment claims for the first time fell more than expected last week, the Labor Department said early Thursday.

The advance figure for seasonally adjusted initial claims decreased by 17,000 to 421,000 in the week ended Dec. 4, from the previous week's upwardly revised estimate of 438,000. Analysts were expecting initial claims to drop to 429,000.

The number of Americans filing continuing claims -- those who have been receiving unemployment insurance for at least a week -- came in lower than expected at 4.08 million for the week ended Nov. 27, a decrease of 191,000 from the previous week's revised figure of 4.27 million. Consensus estimates projected continuing claims to come in at 4.24 million.

The four-week moving average in initial claims, which smoothes the volatility in week-to-week reports, was 427,500, a decrease of 4,000 from the previous week's revised average of 431,500. The four-week moving average in continuing claims was 4,226 million, a decrease of 64,250 from the preceding week's revised average of 4.290 million. The numbers do not include millions of those who claim benefits under the extended unemployment benefits program.

The advance seasonally adjusted insured unemployment rate was 3.2% for the week ending Nov. 27, a decrease of 0.2% from the previous week's unrevised rate of 3.4 percent.

The

SPDR Dow Jones Industrial Average

(DIA) - Get Report

and the

SPDR S&P 500 ETF

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were rising at the open, up 0.4% each while the

PowerShares QQQ

(QQQQ)

was up 0.5%.

Last week, the government said the

economy added 39,000 jobs in November

, significantly lower than the 140,000 economists were expecting. The unemployment rate climbed to 9.8%. The weaker jobs data challenged hopes for a speedier recovery.

Still, initial weekly claims have remained below 450,000 for the several weeks, a sign that layoffs are on the decline. The four-week moving average continues to edge lower as well.

President Obama reached a compromise with Congressional Republicans earlier this week to extend the Bush tax cuts across the board for another two years and to reauthorize the extended unemployment benefits program for the long-term unemployed.

The deal has encouraged hopes of a recovery as certainty over taxes should encourage businesses to hire more workers. Lower payroll taxes are also expected to encourage spending. Markets will be looking ahead to the

Federal Reserve's

policy meeting next week for any changes to the central bank's plan to boost the economy through quantitative easing.

-- Written by Shanthi Bharatwaj in New York

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