Jobless Claims Fall to Lowest Level Since July 2008

Initial jobless claims fell to the lowest level since July 2008 last week, dropping 34,000 to 407,000 in the week ending Nov. 20, the Department of Labor said Wednesday.

The figures were sharply lower than economists' forecast of 435,000.

Employers are slowly adding workers as the economy recovers and retailers are taking on temporary staff as they gear up for holiday season.

"We are seeing signs of life in the labor market," Chris Rupkey, an economist at Bank of Tokyo-Mitsubishi UFJ, told Bloomberg News before the report. "This bodes well for the holiday shopping season. More consumers have more paychecks this year as the economy has made the turn from jobs destruction to jobs creation."

Still, the recovery remains weak and unemployment is likely to remain high. The Federal Reserve is forecasting unemployment remaining above 7% in 2011 and 2012.

The four-week moving average of claims, a clearer measure of unemployment trends, fell 7,500 to 436,000. The revised average for the previous week was 443,500.