Published February 09, 2012
New claims for unemployment benefits unexpectedly fell last week, a government report showed on Thursday, further evidence the labor market was gaining traction.
Initial claims for state unemployment benefits dropped 15,000 to a seasonally adjusted 358,000, the Labor Department said. The prior week's figure was revised up to 373,000 from the previously reported 367,000.
Economists polled by Reuters had forecast claims rising to 370,000. The four-week moving average for new claims, seen as a better measure of labor market trends, fell 11,000 to 366,250 - the lowest level since April 2008.
The claims data pointed to building strength in the labor market. The economy has had two straight months of job gains above 200,000 and the unemployment rate dropped to a three-year low of 8.3 percent in January.
Solid employment gains and strong manufacturing activity have prompted analysts to temper their expectations of a sharp slowdown in growth in the first quarter after a brisk 2.8 percent annual pace in the final three months of 2011.
The upbeat data have raised doubts about the Federal Reserve's expectation that it could hold interest rates near zero at least through late 2014 and reduced the odds of a third round of bond buying to spur the recovery.
Last week's decline in both new applications for jobless benefits and the four-week average pushed them closer to the 350,000 mark that economists say would signal sustained labor market strength.
A Labor Department official said there was nothing unusual in the state-level data and that no state had been estimated.
Despite the continued improvement, the labor market recovery still has a long away to go.
The number of people still receiving benefits under regular state programs after an initial week of aid rose 64,000 to 3.52 million in the week ended January 28.
Economists had forecast so-called continuing claims rising to 3.50 million from a previously reported 3.44 million.
The number of Americans on emergency unemployment benefits fell 21,789 to 2.99 million in the week ended January 21, the latest week for which data is available.
A total of 7.66 million people were claiming unemployment benefits during that period under all programs, up 7,982 from the prior week.