By Alan Fein

(AXcess News) New York - The US Department of Labor reported that initial jobless claims for the week ending Oct. 31, 2009 fell 20,000 to 512,000 claims, the lowest level in first-time unemployment filings since January.

The 4-week moving average of initial claims also fell, down 3,000 at 523,750 from the previous week's revised 526,750 claims.

The drop in initial jobless claims was nearly double what economists were expecting as a whole.  Still, the level of jobless claims has remained above 500,000 for 51 consecutive weeks.  Until jobless claims fall to the 300,000 level, the job market in the United States will continue to contract.

Continuing claims fell 63,000 to 5.75 million, the lowest level since March.

Total unemployment rolls for the week ending Oct. 17th was 9.53 million, up 136,000 from 9.36 million in the previous week.

Despite the great looking numbers the nation's unemployment rate remains near 10% which does not include the number of American workers who's benefits expired and either dropped out of the job market or have reluctantly accepted part-time employment.

Peter Morici, former Chief Economist at the United States International Trade Commission said, "If labor force participation today were at the same level as when President Bush took the helm, the unemployment rate would be about 13 percent."

Morici predicted that "With a slow economic expansion, job losses will continue for several more months, and total losses will exceed 8 million before the hemorrhaging ends."