U.S. jobs market holding firmer despite slowing growth
By Lucia Mutikani
WASHINGTON (Reuters) - The number of Americans filing for jobless benefits fell last week and layoffs in December were the smallest in 15-1/2 years, pointing to labor market strength even as economic growth appears to have slowed sharply in the fourth quarter.
Coming on the heels of a report on Wednesday showing private payrolls in December notched their biggest increase in a year, the data on Thursday suggest the economy's fundamentals remain healthy as it struggles against the headwinds of a strong dollar, bloated inventories and energy sector investment cuts.
"The data are supportive of continued job gains. You don't go into a recession with jobless claims and layoffs at these low levels," said Jacob Oubina, senior economist at RBC Capital Markets in New York.
Initial claims for state unemployment benefits dropped 10,000 to a seasonally adjusted 277,000 for the week ended Jan. 2, the Labor Department said. The decline partially unwound the prior week's jump, which had lifted claims to their highest level since early July.
Last week was the 44th straight week that claims held below the 300,000 mark, which is associated with a healthy labor market. That is the longest run since the early 1970s.
The four-week moving average of claims, considered a better measure of labor market trends as it strips out week-to-week volatility, slipped 1,250 to 275,750 last week.
The encouraging news on the labor market comes ahead of the release on Friday of the closely watched employment report for December. According to a Reuters survey of economists, nonfarm payrolls likely increased 200,000 in December, on top of the 211,000 jobs added in November. The unemployment rate is seen unchanged at a 7-1/2-year low of 5 percent.
"The current (claims) data continue to indicate that U.S. labor markets are fundamentally healthy. We expect a similar read from tomorrow's December employment report," said Jesse Hurwitz, an economist at Barclays in New York. Continued...