US claims for initial jobless benefits last week posted their biggest decline in nearly a year, erasing a holiday-related spike to show a trend toward a healthier labor market remained intact.
The number of Americans filing for first-time unemployment benefits dropped sharply to 404,000 from a downwardly revised reading of 441,000 in the prior week, the Labor Department said on Thursday.
The 37,000 drop in claims was the biggest since the week that ended February 6, when claims fell by 51,000. Analysts had expected weekly jobless claims to fall to 420,000.
A US Labor Department official said the larger-than-expected decline was partly explained by jobless claims returning to trend after the big rise the earlier week.
The big spike in the week ended January 8 may have reflected a backlog of claims built up over the holiday season.
The US Labor Department data corresponds to the survey week for the government's closely watched report on employment, which will be released on February 4. The jobless rate has remained high, and was reported at 9.4% in December.
The four-week moving average of new claims, which strips out short-term volatility, dropped by 4,000 to 411,750.
Economists say getting the four-week average for new jobless claims below 400,000 would be an important signal the lofty unemployment rate was set to come down.
Continuing claims fell to 3.86 million in the week ended January 8, the lowest level in over 2 yrs.
However, the total number of Americans on benefit rolls, including extended benefits under emergency government programs, jumped to 9.6 million in the week ended January 1 from 9.2 million the prior week.-Paul A. Ebeling, Jnr. www.livetradingnews.com