Weekly Jobless Claims Fall to Nearly Five-Year Low

The number of Americans filing new claims for jobless benefits fell last week to a near five-year low, a sign of economic health that could help convince the Federal Reserve to wind down a bond-buying stimulus program.

Initial claims for state unemployment benefits slipped 9,000 to a seasonally adjusted 323,000, the Labor Department said on Thursday. Claims for the prior week were revised to show 1,000 more applications received than previously reported.

Claims are now near their levels in January 2008, the early days of the 2007-09 recession. The lowest level this year was 322,000 earlier this month.

Economists polled by Reuters had expected first-time applications to fall to 330,000 last week.

A department analyst said data for three states was estimated because the states did not provide data in time for the report.

The four-week moving average for new claims fell to its lowest level since October 2007, before the recession began. This measure, which is closely followed because it irons out week-to-week volatility, dipped 3,000 to 328,500.

The report has no direct bearing on Friday's monthly employment report, which is expected to show employers outside the farming sector added 180,000 jobs to their payrolls in August.

But the claims data could reinforce confidence that the labor market is posting a slow yet steady comeback.

Hiring moderated a bit in July and a pickup this month could cement expectations the Federal Reserve will announce a scaling back of its monthly $85 billion bond-buying program at its September 17-18 policy meeting. It has been making the monthly purchases to hold down interest rates.

The U.S. central bank has said it plans to start tapering the purchases later this year, but would be guided by economic data.

The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid fell 43,000 to 2.951 million in the week ended August 24.