Weekly jobless claims dip to 402,000 but still are high

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New jobless claims dipped last week to 402,000, another somewhat encouraging sign for the still-troubled economy -- though still too high to make a dent in the unemployment rate.

The new data Thursday came as the government also said that the economy grew at a 2.5% annual rate in the third quarter. Combined, the news is helping boost a stock market already thrilled by a long-awaited deal in Europe earlier in the day to address the debt crisis.

The government figures on unemployment claims and gross domestic product ‘are consistent with a brighter recovery,’ said Chris Rupkey, chief economist at Bank of Tokyo-Mitsubishi in New York.

‘The economy is off life support and the chance of a double dip is fading,’ he said. ‘There is not one sign of recession in these data today.’

The Labor Department said new claims for unemployment benefits last week were down 2,000 from the previous week’s 404,000. The average for the last four weeks was 405,500.

Economists say that claims need to be consistently below 400,000 for strong job growth.

But economist Sung Won Sohn at Cal State Channel Islands said the economy still is not growing fast enough to see a major change in the nation’s 9.1% unemployment rate in the near future.

The government will report on October job creation on Nov. 4. Economists are expecting about 100,000 new jobs were added this month, roughly the same as in September, according to a survey by Bloomberg News. And September’s numbers did not budge the unemployment rate.

‘The economy has shed fears of a double-dip recession and has regained some strength,’ Sohn said. ‘However, it is too early to celebrate a return to a robust economic recovery.’

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-- Jim Puzzanghera