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WASHINGTON (AP) — Fewer people applied for unemployment aid last week, the third drop in four weeks and a sign that more employers are hiring while layoffs are falling.
If the decline continues, it could signal more hiring in the near future. The report comes after the Labor Department said last week that private employers in October added the most jobs in six months.
First-time applications for unemployment benefits fell 24,000 last week to a seasonally adjusted 435,000, the Labor Department said Wednesday. Wall Street economists had expected a smaller decline.
The four-week average of applications, a less volatile gauge, fell 10,000 to 446,500. That's the lowest level for the average since the week that ended Sept. 13, 2008 — just before the financial crisis intensified with the collapse of Lehman Brothers. Still, weekly applications would need to fall below 425,000 to indicate that hiring is picking up significantly, economists say.
Economists were heartened by the figures.
The report is "encouraging" and "in line with the view that the labor market and overall economy are starting to strengthen," said Daniel Silver, an economist at JPMorgan Chase.
Still, economists stressed that the decline would need to continue for several more weeks to show that employers are growing steadily more confident about hiring. Mark Vitner, an economist at Wells Fargo, said that if the drop in claims endures, net job gains could rise from this year's average of 90,000 a month to 140,000 next year.
Yet even that's barely enough to keep up with population growth. The economy needs to create at least 300,000 net jobs a month to make a major dent in the unemployment rate, now at 9.6 percent.
The weekly jobless claims figures closely track layoffs, which have fallen sharply in the past year. A Labor Department report Tuesday showed that private sector layoffs have fallen to a four-year low. And small businesses, on average, are no longer cutting their work forces, according to a separate survey released Tuesday by the National Federation of Independent Business.
Separately, the trade deficit narrowed in September by 5.3 percent to $44 billion in September as imports retreated slightly while exports edged higher.
Rising sales of American airplanes and industrial machinery helped push exports to $154.1 billion in September. That's the highest level of exports in two years.
Still, imports exceed exports by a wide margin even though they fell 1 percent last month to $198.1 billion. And the trade gap through the first nine months of this year remains 40 percent wider than it was a year ago.
Weekly first-time applications for unemployment aid are now at their lowest level since early July, when they were temporarily lowered by the July 4 holiday. Last week's figures are also the second-lowest this year.
Applications fell partly because the weather has been relatively warm so far this fall, the Labor Department said. Construction and manufacturing firms haven't temporarily laid off as many workers due to cold weather as they have in the past.
Applications have previously dropped sharply this year, but have always bounced back. They have fluctuated around 450,000 for most of this year, after falling last year from about 600,000 when the recession ended in June 2009.
Some companies are hiring new workers, despite the slow economy. US Airways said Monday that it plans to hire 500 flight attendants and pilots next year, mostly to cover planned retirements and attrition. The jobs will initially be offered to former employees laid off during the downturn.
The number of people continuing to claim unemployment aid fell by 86,000 to 4.3 million last week, the department said. But that doesn't include millions of additional people on extended unemployment programs that were set up during the recession.
Including the emergency programs, about 8.6 million people received jobless aid in the week that ended Oct. 23, the latest data available. That's down by about 300,000 from a week earlier.