Jobless Applications Drop to 404,000 From Previous Week

WASHINGTON -- Fewer people applied for unemployment benefits last week, down to 404,000 for the week ending Jan. 15, the Labor Department reported Thursday.

That's 37,000 fewer than the previous week.

Applications remain near the two-year lows reached over the winter holidays. Fewer than 425,000 people applying for benefits is considered a signal of modest job growth. Economists say applications must fall consistently to 375,000 or fewer to substantially reduce the unemployment rate.

Applications are far below their peak during the recession of 651,000, reached in March 2009. They have fallen by about 16 percent over the past four months, signaling employers are laying off fewer workers.

Last week's decline reduced the four-week moving average, a less volatile measure, to 411,750. That's the third decline in four weeks.

The number of people continuing to receive unemployment benefits fell to 3.9 million in the week ending Jan. 8, its lowest level since October 2008. That doesn't include millions of long-term unemployed who are receiving extended benefits from the federal government under an emergency program set up during the recession.

The Associated Press contributed to this report.