The Labor Department reported Thursday that jobless benefits dropped 34,000 to a seasonally adjusted 388,000 in the past week. Economists expected a smaller drop to 413,000 claims. Not only was the drop larger than expected, but it was also the lowest level since July 2008.

The four-week average of new claims, which helps smooth out data, fell by 12,500 to 414,000 -- also the lowest level since July 2008. In the week ending December 18, the number of people continuing to receive state unemployment benefits increased 57,000 to 4.13 million. The four-week average of these same claims dropped 37,50 to 4.12 million, the lowest level since November 2008.

And we're off! The Labor Department reported that new claims for unemployment dropped last week, shedding 27,000 to a total of 451,000 claims. Economists had expected a drop of just 2,000 claims.

The four-week moving average of new claims (which takes weekly fluctuations into account) dropped last week as well, falling 9,250 to 477,750. This is the main reason for Thursday's early rally, as the Dow Jones was more than 60 points higher. What's more, the Dow has turned positive for the year.

For the first time in four weeks, the Labor Department's report on initial jobless claims held some good news. During the past week, new requests for unemployment benefits dropped sharply.

Last week 31,000 fewer people issued claims for unemployment help, bringing the seasonally adjusted number of initial claims to 473,000. As noted, this is the first drop in the past four weeks, bringing an end to a rather large three-week increase in claims.

Investors are digesting a bit of bad news concerning the economy, as initial applications for unemployment insurance increased to 500,000 during the past week.

The 12,000-claim rise suggests that the economy is slowing and that employers are cutting jobs. The last time initial claims for unemployment insurance were this high was back in November. The latest data does not include millions of unemployed receiving extended insurance, which is paid for by the federal government. Roughly 5.6 million unemployed workers were on this extended insurance as of the end of July.

Investors and economists received a rather nasty surprise this morning when the Labor Department released its weekly data on initial claims for jobless benefits. According to the Labor Department, new claims for unemployment insurance rose by 19,000 last week to a seasonally adjusted 479,000.

The government did note that some of the surprise increase (a small decrease was expected) may be attributed to difficulties the government has in adjusting for seasonal factors. The four-week average of initial claims increased by 5,250 to 452,250.

The Labor Department just released June jobs data, revealing a drop stemming from the layoffs of temporary census workers. This drop was partially offset as private employers added a "modest number" of jobs (pegged at 83,000 workers). The 125,000 jobs eliminated was the most since October, with 225,000 eliminated temporary census jobs leading the way.

Some may look at the fact that the unemployment rate dropped from 9.7% to 9.5% as good news, but that may not be the case.

The Labor Department issued a bit of a nasty surprise this morning in its report on initial jobless claims. Last week, the department issued 25,000 new claims for unemployment benefits, far more than the expected drop of 6,000 claims. The resulting 471,000 total claims in the past week was the most in a month.

In addition, the four-week average of initial claims, which many see as a better gauge of employment because it smooths out the volatile weekly numbers -- increased. According to the Labor Department, there were no unusual factors contributing to the release.

We have an absolute crisis of the greatest magnitude facing the unemployed. After Sunday, February 28, the jobless will no longer be able to apply for federal unemployment benefits or the COBRA health insurance subsidy.

Federal benefits kick in after the basic state funded 28 week period. Federal benefits are divided into tiers and the jobless must apply each time they move up to a new tier.

Here are some devastating statistics:

• Nearly 5 million will run out of benefits by June.
• Right now, 1.2 million stand to lose benefits in March.

The Commerce Department gave us a nice little surprise this morning, revising up its fourth-quarter estimate of the Gross Domestic Product. Economic activity grew by 5.9% during the fourth quarter, which was the fastest rate since the third quarter of 2003. Last month, the Commerce Department estimated that the GDP rose by an annual 5.7% during the fourth quarter.

Here is the thing, this figure was in line with expectations of economists, so all of the glad handing may be a bit premature. Inventory liquidation slowed more than experts expected, which contributed the most percentage points to the GDP since the fourth quarter of 1987. Business spending increased 6.9%, which was far better than the earlier estimate of 2.9%. It added 0.62 percentage point to the GDP.

Cue the alarms, the warning sirens, the panic and the bear stampede on the Street today ... the U.S. nonfarm payrolls dropped unexpectedly in December.

The good news? November nonfarm payrolls were actually revised higher, reflecting a gain of 4,000 jobs. Despite November's gain, payrolls dropped by 4.2 million in 2009, bringing the two-year total of job losses for the recession to 7.3 million. As for the official unemployment rate, it remained at 10% during December. That said, the data that includes discouraged workers and those forced to work part time increased to 17.3% from 17.2%. Perhaps the most discouraging aspect of the report was that there were "few signs of further improvement in labor conditions."

Some analysts may tell you that the market could "care less" about the ADP report (scroll down to the fifth paragraph to see CRT Capital Group's comments), but Treasurys are a bit lower thanks to the latest report, and the markets didn't get the boost they needed and remained near flat territory.

The data show that 169,000 jobs were cut in November -- the fewest cut since July 2008. In addition, October's data of 203,000 jobs lost were revised down to 195,000. Still, November's decline marks a 22nd straight month in which private-sector jobs were lost. The ADP noted that while "overall economic activity is stabilizing, employment usually trails economic activity, so it is likely to decline for at least a few more months."

While this article is a few days old, I still found its message rather interesting. Jeff Cox's article takes a look at the U-6 number of unemployment. This number is the "broadest" measure of unemployment, and it shows that roughly 17.5% of Americans are either without a job or underemployed. This is the highest reading since the U-6 number became an official labor statistic in 1994. The U-3 rate (which is what most investors follow) came in at 10.2% in October, which was the highest reading since June 1983.

Last week, the number of people filing initial claims for state unemployment dropped by 20,000. As a result, benefits dropped to a seasonally adjusted 512,000. This drop in filings was the first in the past two weeks, and it is the lowest level of initial claims seen since early January.

That said, initial jobless claims have come in atop 500,000 for the past 51 weeks. In addition, the four-week average of claims dropped 3,000 to 523,700. This total is the lowest since the beginning of the year. Expectations called for initial jobless claims to drop to 520,000 last week, so it may be time to sound the rally bell.

The unemployment rate increased in 23 states in September, with 43 reporting job losses for the month (though not at an accelerating rate). This does signal that we're (hopefully) in the early stages of an economic recovery ... though this can also mean that some job seekers have just given up (and are no longer counted).

Layoffs have slowed down a bit, but companies aren't crazy about taking on new bodies. So far, 600,000 people have dropped out of the hunt. Unemployment now sits at 9.8%.

First-time claims for jobless benefits fell last week, hitting the lowest level we've seen since January. The U.S. Department of Labor pegged the number at 521,000. This is down from the previous week's 554,000 (which had been revised upward). Wall Street economists anticipated 540,000. Claims of this type have fallen four times in five weeks, and the four-week average reached 539,750 – its lowest level since January 17, 2009.

In general, first-time claims for unemployment benefits have been declining since the spring, though slowly. Unfortunately, they still remain well above the 325,000 that economists claim to be indicative of a healthy economy.