The number of unemployment benefit claims filed last week declined by more than expected-to the lowest level reached in over a year, the Labor Department said in a Wednesday report. The Labor Department said that the number of people filing first-time claims for jobless benefits fell by 35,000 to 466,000-the lowest level for initial claims since the week of September 13, 2008, and was far better than the 500,000 that economists had expected. The number of workers receiving benefits also fell sharply, dropping 190,000, to 5.42 million, the lowest level for continuing claims since February. The report comes after the unemployment rate hit a 26-year high of 10.2 percent in October and many economists believe the recovery will remain so sluggish that the jobless rate will keep rising, possibly surpassing 10.5 percent by the middle of next summer. Federal Reserve policymakers worried at their November meeting that the unemployment rate could remain heightened for several years, according to a report on the discussions, released Tuesday. New claims last week dropped below 500,000 for the first time since the first week in January. Weekly claims peaked at 674,000 in March and have generally been trending lower since then. However, many economists believe that claims must drop to around 425,000 to signal actual growth in employment. Economists expect 145,000 payroll job cuts for November, a slight improvement from the net job loss of 190,000 last month. Recent reports indicate employers are continuing to lay off workers. Struggling Internet company AOL last week said it plans to cut up to 2,500 jobs, more than a third of its work force, once it departs from media conglomerate Time Warner Incorporated. And Connecticut-based health insurer Aetna Incorporated said it will cut 625 jobs, or nearly 2 percent of its staff, and will make similar job cuts in the first quarter of 2010 due to the lagging economy and the potential impact of health care reform.
