Weekly US jobless aid applications drop to 343K

The Labor Department said Thursday that weekly applications for unemployment benefits fell 29,000 last week to a seasonally adjusted 343,000, the lowest in two months. It is the second-lowest total this year.

Applications are a proxy for layoffs, so the drop indicates that companies are cutting fewer jobs. But employers also need to step up hiring to rapidly push down the unemployment rate.

The drop suggests that companies aren't laying off workers in advance of the "fiscal cliff," the package of tax increases and spending cuts set to take effect early next year.

"Worries about the fiscal cliff are not translating into any significant weakening in the labor market yet," said Jim O'Sullivan, an economist at High Frequency Economics. "Today's reading suggests net improvement, although it is just one week."

Applications spiked five weeks ago because of Superstorm Sandy. The storm's impact has now faded. The four-week average, a less volatile measure, fell 27,000 to 381,500.

Before the storm, applications had fluctuated between 360,000 and 390,000 this year.

The storm had little effect on overall hiring in November. Employers added 146,000 jobs last month, the government said last week. That's about the same as the average monthly gain of 150,000 in the past year.