Unemployment claims drop to lowest level in 2 months

WASHINGTON — The number of Americans filing applications for unemployment benefits dropped sharply for a second week, pushing claims down to the lowest level in two months.

The Labor Department said 304,000 newly laid off workers filed claims for unemployment benefits last week, a drop of 20,000 from the previous week, when claims had fallen by 34,000.

The two straight weeks of big declines pushed claims to the lowest level since they were at 300,000 the week of Oct. 14. The recent decreases bolstered the view that even though economic growth has slowed sharply this year, employers are holding on to their workers in anticipation of an economic rebound.

Labor Department analysts cautioned that it is difficult to get a clear reading on layoff activity in the period between Thanksgiving and New Year's Day because the holidays disrupt the normal pattern for filing claims.

Still, the big decline of 20,000 applications was far better than the drop of 4,000 that economists had been expecting. The claims report was just the most recent indication that the labor market is holding up well in the face of the current economic slowdown.

The government reported last week that employers added 132,000 jobs to payrolls in November after adding just 79,000 jobs in October. The gain occurred in spite of the fact that construction companies slashed 29,000 jobs last month, reflecting the big downturn in housing this year, while manufacturing lost jobs for a fifth consecutive month as the nation's automakers continued to struggle.