U.S. jobless claims signal firmer labor market; other data mixed

Thu Dec 18, 2014 12:34pm EST
 
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By Lucia Mutikani

WASHINGTON (Reuters) - The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting the labor market continued to strengthen.

While other data on Thursday showed factory activity in the mid-Atlantic region braked sharply in December, that followed hefty gains in the prior month and analysts said manufacturing remained on solid ground.

"The economy continues to run hard as it finishes out the year," said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.

Initial claims for state unemployment benefits declined by 6,000 to a seasonally adjusted 289,000 for the week ended Dec. 13, the Labor Department said, defying Wall Street's expectations for a rise to 295,000.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, slipped by 750 to 298,750.

The data came a day after the Federal Reserve offered an upbeat assessment of the labor market and the broader economy, and signaled it could start raising interest rates next year.

The U.S. central bank, which has kept its short-term interest rate near zero since December 2008, lowered its unemployment rate forecast on Wednesday. Many economists expect the first rate hike in mid-2015.

In a second report, the Philadelphia Federal Reserve Bank said its business activity index fell to 24.5 this month from a reading of 40.8 in November. Any reading above zero indicates expansion in the region's manufacturing sector.   Continued...

 
Job seekers adjust their paperwork as they wait in line to attend a job fair in New York February 28, 2013. REUTERS/Lucas Jackson