The number of U.S. workers filing new applications for unemployment insurance fell sharply last week, boosting hopes of recovery in the labor market.
Initial claims for state unemployment benefits fell 14,000 to a seasonally adjusted 442,000, the Labor Department said on Thursday. The report included annual revisions to the weekly unemployment claims seasonal factors going back to 2005.
Using the old seasonal factors, claims would have dropped only to 453,000, a Labor Department official said. Analysts polled by Reuters had expected claims to slip to 450,000 from a previously reported 457,000 the prior week.
It's an indication that the labor market continues to improve. We have a recovery, but it is not robust; it is still fragile. The trend continues to move in the right direction, said Ward McCarthy, chief financial economist at Jefferies & Co. in New York.
U.S. stock index futures held gains after the report, while Treasury debt prices trimmed gains slightly. The U.S. dollar was slightly higher against the yen.
The four-week moving average of new claims, which irons out week-to-week volatility, fell 11,000 to 453,750, the lowest since September 2008.
The decline in initial claims last week pushed them into a range that analysts reckon signals labor market stability.
The labor market has lagged the economy's recovery from its worst downturn since the 1930s, but payrolls are expected to grow this month as the government steps up hiring for the 2010 census. About 8.4 million jobs have been lost since December 2007, when the recession started.
The number of people still receiving benefits after an initial week of aid fell 54,000 to 4.65 million in the week ended March 13, the lowest since December 2008, the Labor Department said. The so-called continuing claims data included the household survey week, from which the unemployment rate is derived.
The unemployment rate has been unchanged at 9.7 percent for two months. Analysts had expected continuing claims to slip to 4.55 million.
The insured unemployment rate, which measures the percentage of the insured labor force that is jobless, was unchanged at 3.6 percent in the week ended March 13.