Unemployment claims sink sharply

CHARLOTTE, NC (WBTV) - The country is finally getting real relief from rampant unemployment, according to new numbers released by The Labor Department.

The number of people applying for jobless benefits fell by 34,000 last week to the lowest level since July of 2008: a seasonally adjusted 407,000.

Wall Street was pleasantly surprised, and the stock market reflected that by jumping 130 points in morning trading.

Now the question is, will claims remain this low in future weeks, or will they bounce back to dangerous levels? Economists say applications for unemployment aid need to stay below 425,000 for several weeks straight to signal that the economy is truly improving.

There are some indications, though, that the scenario could be on the horizon.

Consumer spending is up, and mortgage applications have reached a six-month high.

But actual job gains have been painfully slow this year, and the unemployment rate has remained at 9.6% for three months in a row.

The Commerce Department said this week that the economy grew at a rate of 2.5% from July to September, and that's weak compared to previous recoveries.  The Federal Reserve doesn't expect that percentage to jump any time soon.