New jobless claims drop more than expected

Still, the unemployment rate is too high, and for the recovery to take root, employers need to hire. The economy needs for jobless claims to drop into the low 400,000s or high 300,000s to reflect stronger job growth in the private sector and propel the recovery.

Concerns grew when weekly applications for jobless benefits increased above 500,000 last month. But the gradual decline has calmed fears that companies were going through another round of layoffs. 

The total number of people continuing to receive unemployment insurance fell by 84,000, to 4.49 million, in the week ended Sept. 4.

Those receiving extended benefits — up to 99 weeks in some states — who have exhausted their traditional benefits dropped sharply — by 507,853, to 4.96 million — in the week ended Aug. 28. 

In August, the private sector added 67,000 jobs but overall employment dropped 54,000 — and the unemployment rate ticked up to 9.6 percent — as the federal government continued to let go of temporary census workers.