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 labour market.
Initial claims for state unemployment benefits dropped 43,000 to a seasonally adjusted 265,000 for the week ended January 24, the lowest since April 2000, the Labor Department said yesterday. It was the biggest weekly decline since November 2012.
The drop, which far exceeded economists’ expectations for a fall to only 300,000, probably exaggerates the strength of the jobs market as the data included the Martin Luther King holiday, which means fewer claims were likely processed.
It unwound the prior weeks’ increases, which had pushed claims above the key 300,000 threshold. Economists had largely dismissed that rise as “noise”, noting difficulties adjusting the data for seasonal fluctuations at the start of the year.
US stock index futures added slightly to gains on the data, while the dollar and prices for US Treasury debt were little changed.
The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, fell 8,250 last week to 298,500.
The latest decline in applications for unemployment aid bolsters views of tightening labour market conditions.