The number of Americans filing new jobless applications for claiming their unemployment benefits reached to its lowest level in seven weeks, signaling that the country’s job market is steadily moving on the path of recovery.
The Labor Department on Wednesday released a report showing that the new applications for unemployment benefits declined 9,000 to a seasonally adjusted 280,000 last week.
Meanwhile, several economists had made forecast that the unemployment claims would tick up to 290,000.
The four-week average, a less volatile measure, declined 8,500 to 290,250. That average has plunged 16 percent in the past 12 months.
Talking about the trend in the labor market, JPMorgan Chase economist Daniel Silver said, “What we have seen in the data over the past few months looks favorable for the labor market.”
The number of Americans turning up to claim their jobless benefits has reached to historically low levels, i.e. below 300,000, for 14 of the past 15 weeks. This clearly indicates that firms are retaining their employees and also interested in hiring more.
“This is hinting at ongoing improvement in the labor market. The lack of dismissals allows hiring to better translate into a decline in the unemployment rate,” Gennadiy Goldberg, a strategist at TD Securities in New York, said.
In November, the employers added 321,000 jobs, which is the most in about three years. The rate of unemployment held steady at 5.8 percent, a drop from 7 percent 12 months earlier.
The Labor Department is scheduled to release its jobs report for the month of December on January 9.