New U.S. jobless claims lowest since Jan.

By Lisa Lambert

WASHINGTON (Reuters) - The number of U.S. workers filing new claims for jobless benefits last week fell to the lowest level since January, the government said on Thursday, showing the hard-hit labour market may be slowly improving.

Initial claims for state unemployment insurance dropped to 502,000 in the week ended November 7 from a revised 514,000 the prior week. Analysts polled by Reuters had expected claims to slip to 510,000 from an initially reported 512,000.

"It shows that companies are cutting jobs at a slower pace than during the financial crisis," said Gary Thayer, chief macrostrategist for Wells Fargo Advisors in St. Louis. "We're trending in the right direction, but we are probably several months away from (rising) monthly payrolls numbers."

The U.S. economy lost 190,000 jobs last month and the unemployment rate hit a 26-1/2 year high of 10.2 percent. While employers are cutting jobs at a slower pace than they were at the start of the year, economists expect the jobless rate to trend higher before peaking in mid-2010.

Rising unemployment is causing a political headache for President Barack Obama and his fellow Democrats, even though the economy appears to have snapped out of its deepest downturn since the 1930s with growth at an annual rate of 3.5 percent in the third quarter.

The Democratic Party lost two state governorships to Republicans in elections this month that focussed heavily on the economy, and mid-term elections in November 2010 could eat into the majority Democrats enjoy in Congress.

Obama has said his administration is considering a number of options to spur job growth, including ramping up government infrastructure spending and new business tax cuts.

On Thursday, he announced the White House would hold a forum on jobs growth in December.