RJ and Makay

New applications for unemployment benefits fell significantly last week — by 42,000 to 415,000, says the Department of Labor (DOL). The continuing unemployment claims picture is looking a bit better, too. In the week ending January 22, continuing unemployment claims fell by 84,000 to a seasonally adjusted 3.93 million. Continuing claims reflect the number of people who previously filed for and are receiving jobless benefits.

Last week's drop in new applications was slightly better than predicted by economists, who were expecting a decline to a seasonally adjusted 418,000. The number of new claims for the prior week was revised higher by 3,000 to 457,000, the DOL notes.

Employment gains last month handily beat forecasts, suggest job figures just released by ADP Employer Services. According to ADP, private employers in the U.S. added 187,000 jobs in January — 47,000 more than the 140,000 economists expected. The ADP report is based on data from about 340,000 businesses employing more than 21 million workers.

ADP's findings are likely to conflict with a pending U.S. Department of Labor (DOL) report, however. The DOL report, due out in two days, is expected to show the U.S. actually did add about 140,000 new jobs in January and that unemployment rose to 9.5%.

According to the U.S. Department of Commerce, the economy grew at a 3.2% annualized rate in the fourth quarter of last year, raising hopes that the recession is truly a thing of the past and 2011 will be even better than 2010. The fourth quarter growth rate is more than 20% better than the 2.6% rate in the previous quarter and the best quarterly increase since the start of 2010.

For all of last year, the economy grew 2.9% — the most since 2005. A key driver of that growth was increased consumer spending, which rose at 4.4%. That pace, the fastest since 2006, was due mainly to increased purchasing of furnishings, appliances, cars, and clothes.