Drop in Unemployment Claims Indicate Market Stabilization

By Neil Irwin and Annys Shin
Washington Post Staff Writers

After a terrible nine months, the pace of job losses finally appears to be slowing down, according to mounting evidence.

Analysts are expecting confirmation on Friday that the labor market is warming up this summer, as the Labor Department releases July employment data. Economists anticipate the report will show that the jobless rate continued to rise– to 9.6 percent, from 9.5 percent, and that employers will turn out to have shed 328,000 jobs. Those results, while horrible by normal standards, would be an improvement over the 467,000 jobs lost in June and would support the idea that the recession is ending.

Thursday, the Labor Department said 550,000 people filed new claims for unemployment insurance benefits last week — down from 588,000 the week before and part of a slow downward trend in the barometer that dates back to March. Various regional surveys of businesses have also shown more promising evidence about the job market.

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