Unemployment claims drop in Canada, U.S.

Fewer people applied for government unemployment benefits in both Canada and the U.S., separate reports showed Thursday.

Statistics Canada said 673,700 people received regular employment insurance benefits in November, down 5,700, or 0.8 per cent, from October.

Before receiving EI, one must submit a claim, and there was a similar trend on that front — there were 248,100 initial and renewal claims received in November, a decline of 8,400, or 3.3 per cent, compared with October.

Canada's unemployment rate sat at 7.6 per cent in December, declining steadily after peaking at 8.7 per cent in August 2009. Over the last 40 years, the unemployment rate has averaged 7.7 per cent in Canada.

The employment trend looks similar in the United States, where the Labour Department reported Friday that the number of new people seeking benefits fell by 37,000 to a seasonally adjusted 404,000 for the week ended Jan. 15.

That's not much higher than the 391,000 level reached last month, the lowest in more than two years. Claims have fallen by about 16 per cent over the past four months, a sign employers are laying off fewer workers.

"The decline in the headline brings the overall trend back in line with the improvement we had witnessed recently," BMO economist Jennifer Lee said of the data.

Economists believe the claims figure must remain below 400,000 to suggest long-term job growth. The figure peaked at 651,000 in March 2009.

"This bodes well for the January [jobs data]," which is due out in early February, Lee said.