Jobless claims fall, but hiring gains far off

WASHINGTON (AP) — Fewer people are claiming unemployment benefits - but still too many to signal that the economy is close to gaining jobs.

First-time claims for jobless benefits dropped last week to a seasonally adjusted 502,000, the Labor Department said today. That's the fewest claims since the week ending Jan. 3, and below economists' estimates.

Claims would have to fall to the high 400s to indicate the economy could soon produce even a slight gain in jobs, estimates Abiel Reinhart, an economist at JPMorgan Chase. That level of claims could be reached by January, he said, and the economy should start gaining jobs sometime in the first quarter of 2010.

Still, Reinhart doesn't expect the gains to be strong enough to push down the unemployment rate - now at a 26-year high of 10.2 percent - until the second quarter.

Zach Pandl, an economist at Nomura Securities, said he thinks jobless claims would need to drop to about 425,000 before jobs would be added. Pandl expects the economy to produce a net gain in jobs by January.

President Barack Obama said today he'll host a White House summit next month on combating the joblessness that continues to drag on a struggling economy.