Initial jobless claims in the United States have unexpectedly fallen for the fifth straight week, a sign the job market is improving.

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Erin McNiff waits to meet with a job counsellor at the California Employment Development Department office in Sacramento last month. ((Rich Pedroncelli/Associated Press))

First-time claims for unemployment insurance dropped by 5,000 to a seasonally adjusted 457,000, the lowest total since the week of Sept. 6, 2008, the Labour Department said Thursday. Economists had been expecting initial claims to edge up 9,000 to 475,000, so the dip is a surprise.

But it may be somewhat misleading — an analyst at the U.S. Department of Labour said the closing of state unemployment offices for last week's Thanksgiving holiday was responsible for some of the decline.

The unemployment rate is at 10.2 per cent and economists expect it to keep climbing into 2010. The nation's economy has lost jobs for 22 straight months.

Initial claims are a closely watched indicator because they are considered a gauge of layoffs and a sign of whether companies are willing to hire. The Federal Reserve's Beige Book report Wednesday noted employers in most regions remain reluctant to hire new workers, even as the economy stages a modest recovery.

The four-week average of claims, which smooths out fluctuations, dropped for the 13th straight week to 481,250, about 180,000 below the peak for this recession reached this spring.

The department's employment report for November, to be released Friday, is expected to show that employers shed another 130,000 jobs after cutting 190,000 in October.

Congress extends benefits

Congress added another 14 to 20 weeks of extra benefits last month, the fourth extension since the recession began and the longest total extension on record.

That boosted the total number of weeks a person could collect unemployment to as much as 99 in the hardest-hit states.  

About 4.5 million people were receiving extended benefits in the week ended Nov. 14, the latest data available. That's an increase of about 300,000 from the previous week.

Meanwhile, layoffs continued. Gannett Co. said it was cutting 26 newsroom jobs at its flagship USA Today newspaper and eliminating 11 positions at USA Weekend magazine. Another media company, the Greenspun Media Group, which publishes the Las Vegas Sun, announced it was reorganizing its operations in a cost-cutting move and would lay off an unspecified number of workers.

If the jobs picture doesn't improve, some Democrats fear they'll pay a punishing price in next year's mid-term elections.

U.S. President Barack Obama convened a job summit at the White House on Thursday, aiming to draw proposals from more than 100  invited guests about putting Americans back to work and lowering the 26-year-high unemployment rate. Leaders from top U.S. companies including Google, AT&T, Disney and FedEx were there.

"We cannot hang back and just hope for the best when we've seen the kind of job losses that we've seen over the last year," Obama said.

That didn't do much to satisfy Rep. Maxine Waters, a California Democrat. She and other members of the Congressional Black Caucus have been holding up bills in committee in a bid to make jobs the president's priority.

"We need jobs, we need economic development," she said.

California saw its initial claims number leap by 14,796, due to layoffs in the service sector, the Department of Labour said. Illinois, North Carolina, Pennsylvania and Texas had the next largest increases.

The largest decrease in claims was in Michigan, with a drop of 1,242, which was attributed to fewer layoffs in the auto industry. Indiana, Hawaii, Oregon and the Virgin Islands also reported declines.