The number of Americans filing new claims for unemployment benefits fell last week to the lowest level in nearly a month, a hopeful sign for the labor market.
Initial claims for state unemployment benefits decreased 42,000 to a seasonally adjusted 338,000, the Labor Department said on Thursday.
While recent data on claims have been clouded by seasonal volatility around the winter holiday period, Thursday’s report showed claims in a range that supports expectations for faster economic growth next year.
“With labor markets on the mend and consumer confidence on the rise, we look for broader economic improvement to continue pushing claims (lower),” said Gennadiy Goldberg, an analyst at TD Securities in New York.
New jobless claims have trended higher since September and are now roughly where they were during the early days of the 2007-09 recession. Economists, however, say the level of claims is still consistent with job growth, and other labor market indicators have pointed to a strengthening labor market.
The four-week moving average for new claims, which irons out week-to-week volatility, increased 4,250 to 348,000.
“The underlying trend remains favorable,” said Ryan Sweet, an economist at Moody’s Analytics in West Chester, Pennsylvania. “We will be able to muster stronger job growth in 2014.”
The claims data appeared to have little impact on prices for U.S. stocks and bonds, which were little changed in thin holiday-season trading. <.N> <US/> Citing an improving labor market, the Federal Reserve earlier this month announced it would reduce its monthly $85-billion bond buying program by $10-billion starting in January.
Payrolls increased solidly in October and November. The unemployment rate dropped to a five-year low of 7.0 per cent in November.
A Labor Department analyst said no states had been estimated, but noted that claims were still in a period of volatility related to the holidays. The volatility is caused by the difficulty inherent in adjusting weekly data for seasonal factors like retailers and schools adjusting the sizes of their staff for the winter season.
Claims for the prior week were revised to show 1,000 more applications received than previously reported. Economists polled by Reuters had expected first-time applications to fall to 345,000 last week.
The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid rose 46,000 to 2.923 million in the week ended December 14.