US jobless claims fall more than expected, near cycle lows

[WASHINGTON] The number of Americans filing for unemployment benefits fell more than expected last week, suggesting the labour market remained on solid footing despite slowing economic growth and a stock market rout.

Initial claims for state unemployment benefits declined 16,000 to a seasonally adjusted 269,000 for the week ended Feb 6, the Labour Department said on Thursday. The prior week's claims were unrevised.

Economists polled by Reuters had forecast claims slipping to 281,000 in the latest week. The drop last week pushed down claims to near their post-recession lows around 256,000, pointing to very low layoffs despite an uncertain economic outlook and equities turmoil.

A Labour Department analyst said there were no special factors influencing last week's claims data and no states had been estimated.

Claims drifted higher at the start of the year. That had raised concerns that the headwinds of a strong dollar, weak global demand and spending cuts in the energy sector, which have constrained growth, could be spilling over to the labour market.

The four-week moving average of claims, considered a better measure of labour market trends as it smoothes week-to-week volatility, fell 3,500 to 281,250 last week.

Claims have now been below the 300,000 threshold, which is associated with strong labour market conditions, for 49 straight weeks - the longest spell since the early 1970s.

Federal Reserve Chair Janet Yellen on Wednesday highlighted the labour market strength, but told lawmakers that tightening financial market conditions and uncertainty over China posed risks to the domestic economy.

The government reported last week that nonfarm payrolls increased 151,000 in January, while the unemployment rate fell below 5 per cent for the first time in eight years.

A report on Tuesday showed Americans growing more confident in the labour market, with the number of people voluntarily quitting their jobs hitting a nine-year high in December.

The claims report showed the number of people still receiving benefits after an initial week of aid fell 21,000 to 2.24 million in the week ended Jan 30. The four-week average of the so-called continuing claims slipped 6,250 to 2.25 million.

REUTERS