The number of new applications filed by the Americans for claiming their unemployment benefits dropped last week to its lowest level in about 15 years, signaling towards a bullish labor market.
Even if the drop in jobless claims has probably exaggerated the strength of country’s labor market during a holiday-shortened week, the unemployment claims report released on Thursday suggested the economy was fairly healthy.
The initial jobless claims for state unemployment benefits tumbled by 43,000 to a seasonally adjusted 265,000 for the week that ended on January 24, the lowest level since April 2000, according to the Labor Department report.
Chris Rupkey, chief financial economist at New York-based MUFG Union Bank, said, “Jobless claims are a welcome shot in the arm for those believing the economy is strong. The US remains an oasis of prosperity in the world and will continue to do so.”
This was the biggest weekly drop since November 2012. The decline exceeded the expectations of the economists for a drop to just 300,000. But as the last week also had the Martin Luther King holiday, fewer jobless claims were processed.
The fall unwound the increases of prior weeks, which had pushed the unemployment benefit claims above the key 300,000 threshold.
The four-week moving average of jobless claims declined 8,250 last week to 298,500.
The unemployment claims is considered to be a better measure of the country’s labor market and its trends because it irons out week-to-week volatility.
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