The latest sign was a government report Thursday that the number of newly laid-off workers filing claims for unemployment benefits fell more than expected last week. And the four-week average for claims, which smooths out fluctuations, fell for the 16th straight week, to its lowest point since September 2008, when the financial crisis hit with full force.
Further evidence of a gradually healing economy was a report that orders to U.S. factories for big-ticket durable goods rose in November. The overall increase was less than expected. But excluding the volatile transportation category, the gains were twice what economists had forecast.
The Labor Department said the number of new jobless claims fell to a 452,000 last week, down 28,000 from the previous week, on a seasonally adjusted basis. That's a better performance than the decline to 470,000 that economists had expected.
And the four-week average for claims, which smooths out fluctuations, fell to 465,250 - the 16th straight weekly decline.
Unemployment claims have been falling unevenly since summer. That improvement is seen as a sign that jobs cuts are slowing and hiring could pick up early next year. The fall in weekly claims of 28,000 last week, which followed two smaller weekly increases, shows that the halting improvement continues.
But the Labor Department warned that seasonal employment from holidays and other variables in the calendar made last week a difficult one to seasonally adjust. The actual number of new claims was higher than the previous week, but fewer than expected. The process of adjusting for seasonal variation reduced the number.
Economists monitor jobless claims as a gauge of the pace of layoffs. Analysts say initial claims need to fall to about 425,000 for several weeks to signal the economy is actually beginning to add jobs.
The government said the number of people continuing to receive regular jobless benefits fell by 127,000 to 5.08 million for the week ending Dec. 12. That figure does not include millions of people who have used up the 26 weeks of benefits typically provided by states and are now receiving extended benefits for up to 73 additional weeks, paid for by the federal government.
The number of people receiving extended benefits jumped to 4.37 million for the week ending Dec. 5, an increase of 141,807 from the previous week. That big rise slows that the problem of high unemployment persists despite a decrease in layoffs.
It also reflects the fact that 38 states are now processing claims for the extension of benefits that Congress approved last month.
The economy grew at a 2.2 percent annual rate in the July-September quarter, the first growth in the gross domestic product after a record four straight quarters of shrinking GDP. A string of more positive reports is causing analysts to revise up their forecasts for growth in the current quarter to 3 percent or slightly better.
But unless unemployment starts to decline steadily, consumer spending, which accounts for 70 percent of economic activity, could falter. That could jeopardize the fragile recovery from the nation's longest recession since the 1930s.
The jobless rate dipped in November to 10 percent, down from a 26-year high of 10.2 percent in October. Some analysts fear that unemployment will resume rising in coming months and won't peak until hitting 10.5 percent next summer. Still, the November jobless report showed that businesses slashed their payrolls by just 11,000 jobs on net in November, the smallest decrease since the recession began two years ago.
Federal Reserve officials last week ended their final meeting of the year with a decision to hold interest rates at "exceptionally low levels" for an extended period. The Fed has kept its key federal funds rate at a record low near zero percent for the past year. Many economists don't expect any increases until the unemployment rate begins to decline consistently.
In their assessment of the economy, Fed officials noted that economic activity was continuing to pick up and the pace of layoffs has been slowing.
There were 19 states with decreases of more than 1,000 claims for the week ending Dec. 12 led by North Carolina, which a 14,374 decline, which it attributed in part to fewer layoffs in the textile, construction and service industries. Pennsylvania, New York, Georgia, Wisconsin and California also had at least 10,000 fewer new claims, and all except California mentioned fewer construction layoffs.
The previous week, only Kansas and Kentucky had declines of more than 1,000 new claims.
The two areas with increases of more than 1,000 claims for the week ending Dec. 12 were Louisiana and Puerto Rico. The previous week, 29 states had increases of more than 1,000 claims.