First-time claims for unemployment insurance fell 13,000 for the week ended February 11 to 348,000, hitting their lowest level since March 2008, the Department of Labor reported Thursday. Continuing claims, reported on a one-week lag, fell as well, dropping 100,000 to 3,426,000. That’s the lowest reading for continuing claims since August 2008.

The drop in initial claims was the third consecutive weekly decline. Over the course of the last three weeks, first-time unemployment claims have fallen 31,000, or about 8 percent.

As significantly, the four week moving average of filings – smoothing the more volatile weekly numbers – fell for the fifth straight week and 10th time in the last 11 weeks – to the lowest level since May 2008. The four week average of continuing claims dropped to under 3.5 million – 3,492,500 to be precise – for the first time since September 2008.

While the absolute numbers themselves are encouraging, the trend in the filings is more significant. That said, there was a flurry of improvement a year ago when initial filings fell sharply in the seven weeks between mid-February and the end of March 2011 only to bounce back up, underscoring how fragile the economic and jobs recovery can be.

The total number of individuals receiving benefits – including emergency and extended programs – rose slightly for the week ended January 28. (Those numbers are reported on a two week lag.) The combined program tally rose by 18,304 that week to 7,681,911, suggesting hiring remains a continuing challenge, even as layoffs may have abated. The reported agreement to extend those benefits will result in a sharp drop in the statistics since the agreement would cap benefits at 73 weeks rather than 99 under current provisions.

The Labor Department reports state detail of claims on a one-week lag, noting the largest increases in initial claims for the week ending February 4 were in California (+5,864), North Carolina (+1,211), Illinois (+761), Puerto Rico (+497), and Kansas (+445).

The largest decreases were in Washington (-6,294), Oregon (-3,831), Michigan (-2,551), Wisconsin (-1,438), and New Jersey (-1,266).
Much of the recent volatility in the claims data is due to seasonal adjustment issues rather than underlying changes in the labor market, but the trend in layoffs has clearly slowed. The data on continuing claims are not as clear – the decline could be due to more people finding jobs although some people are exhausting benefits.