U.S. jobless claims drop sharply to near 15-year low

Thu Jan 29, 2015 11:48am EST
 
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By Lucia Mutikani

WASHINGTON (Reuters) - The number of Americans filing new claims for unemployment benefits tumbled last week to its lowest level in nearly 15 years, adding to bullish signals on the labor market.

Though the decline probably exaggerates the jobs market's strength given a holiday-shortened week, Thursday's report suggested the economy was fairly healthy and weathering weakening global growth.

"Claims are a welcome shot in the arm for those believing the economy is strong. The U.S. remains an oasis of prosperity in the world and will continue to do so," said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.

Initial claims for state unemployment benefits dropped 43,000 to a seasonally adjusted 265,000 for the week ended Jan. 24, the lowest since April 2000, the Labor Department said. It was the biggest weekly decline since November 2012.

The drop exceeded economists' expectations for a fall to only 300,000, but last week also included the Martin Luther King holiday, which means fewer claims were likely processed.

The fall unwound the prior weeks' increases, which had pushed claims above the key 300,000 threshold.

Economists had largely dismissed that rise as "noise," given difficulties adjusting the data for seasonal fluctuations at the start of the year.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 8,250 last week to 298,500.   Continued...

 
Job seekers listen to a presentation at the Colorado Hospital Association health care career fair in Denver April 9, 2013. REUTERS/Rick Wilking