Jobless claims at seven-year low, signal firming economy

Thu Apr 10, 2014 11:25am EDT
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By Lucia Mutikani

WASHINGTON (Reuters) - The number of Americans filing new applications for unemployment benefits tumbled last week to the lowest level in nearly seven years, strengthening views of faster job growth.

Thursday's report was the latest sign of momentum in the economy after activity was hobbled by an unusually cold winter.

"The return of warmer temperatures has brought with it better data. There are a number of signs that progress in the jobs market could be accelerating, a positive sign for the broad economy as well," said Jim Baird, chief investment officer at Plante Moran Financial Advisors in Kalamazoo, Michigan.

Initial claims for state unemployment benefits dropped 32,000 to a seasonally adjusted 300,000 for the week ended April 5, the Labor Department said. That was the lowest level since May 2007, before the start of the 2007-09 recession.

The report joined other indicators such as automobile sales and employment data in suggesting the economy ended the first-quarter on a stronger footing, positioning it for faster growth in the April-June quarter.

First-quarter growth is expected to have braked sharply from the fourth quarter's annual 2.6 percent pace, largely because of the harsh weather and businesses placing fewer orders with manufacturers while working off massive stockpiles accumulated in the second half of 2013.

Growth was also seen crimped by the expiration of long-term unemployment benefits, cuts to food stamps and weak exports. First-quarter gross domestic product estimates range as low as 0.6 percent.

U.S. financial markets were little moved by the claims data.   Continued...

People fill out application forms before a screening session for seasonal jobs at Coney Island in the Brooklyn borough of New York March 4, 2014. REUTERS/Shannon Stapleton