IS THIS GOOD NEWS?  WE'LL HAVE TO SEE IN THE COMING MONTHS – AT 10:16 A.M. ET:   From Fox News:

WASHINGTON -- The number of people applying for unemployment benefits plunged last week to the lowest level in nearly three years, boosting hopes that companies will step up hiring this year as the economy strengthens.

Applications sank by a seasonally adjusted 36,000 to 383,000, the lowest point since early July 2008, the Labor Department reported Thursday.

Unemployment applications reflect the level of layoffs, but also can indicate whether companies are willing to hire.

Applications are well below their peak of 651,000, reached in March 2009, when the economy was deep in recession. Applications below 425,000 tend to signal modest job growth. But they would need to dip consistently to 375,000 or below to indicate a significant and steady decline in the unemployment rate.
Last week's sharp decline continues a downward trend that took shape late last year. The last time applications fell below 400,000 was near the end of December.

Harsh winter snowstorms along in the Southeast forced some companies to temporarily lay off workers last month. That sent applications surging to 457,000 in the week of Jan. 22. But since then applications have been falling.

The four-week average, a less volatile measure, dipped to 415,500 last week. That's slightly above the two-year low of 411,250, reached in the week ending Jan. 1.

COMMENT:  Clearly, if unemployment drops it will place Barack Obama in a far more favorable position for next year's presidential race.  However, the drop in unemployment-benefit applications is far from dramatic, and millions of Americans remain underemployed, earning far less than they did before the downturn started. 

This is one of those "wait and see" situations.  The real story will be told toward the end of this year, as we get serious about electing the next president.

February 10, 2011