Jobless Benefit Applications Drop; Analysts Encouraged

WASHINGTON (December 6, 2012)--Some analysts say they're encouraged by how quickly the number of weekly unemployment applications returned to the level from before Superstorm Sandy after the Labor Department reported Thursday that applications dropped 25,000 last week, after a temporary spike caused by the storm.

One private economist says the rapid decline suggests that companies are quickly re-hiring workers who were displaced by the storm.

Pierre Ellis of Decision Economics said rebuilding and repair efforts could also be creating jobs.

The storm is likely to depress the November job figures, which will be reported tomorrow.

Fears over the looming fiscal cliff may also have been a drag on job gains last month.

Some analysts believe the November job gains may be as low as 25,000 to 50,000 because of the storm and because of anxiety over the possible budget cuts and tax hikes.

Before the storm, applications had fluctuated this year between 360,000 and 390,000, which has coincided with only modest declines in the unemployment rate.

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