Jobless Claims Drop; Don’t Get Excited

The number of people filing for unemployment insurance dropped precipitously last week, from 422,000 to 388,000, the first time the number of filers has fallen below 400,000 since mid-2008. But this figure is not likely indicative of a larger trend.

Though economists had predicted 416,000 claims for last week and this number is significantly lower than the prediction, experts can’t rule out the possibility that the Christmas holiday is wreaking havoc on the numbers.

“We need to see more evidence over the next few weeks, particularly in the early part of 2011, that this is a real downside breakout and fewer people are getting laid off,” Stuart Hoffman, chief economist with PNC Financial Services, told CNNMoney.

A total of 8.8 million Americans were receiving some form of government unemployment insurance the week ended Dec. 11, the most recent week for which figures were available. That includes 3.7 million receiving extended benefits; i.e., they had been out of work 27 weeks or more.