US jobless claims fall to lowest level since October

[WASHINGTON] The number of Americans filing for unemployment benefits fell more than expected last week, hitting its lowest level since October, pointing to sustained strength in the labour market that should further dispel fears of a recession.

Initial claims for state unemployment benefits declined 18,000 to a seasonally adjusted 259,000 for the week ended March 5, the lowest reading since mid-October, the Labour Department said on Thursday. The prior week's claims were revised to show 1,000 fewer applications received than previously reported.

Economists polled by Reuters had forecast claims slipping to 275,000 in the latest week. A Labour Department analyst said there were no special factors influencing last week's claims data and no states had been estimated.

Claims have now been below the 300,000 threshold, which is associated with healthy labour market conditions, for a year - the longest run since the early 1970s. Last week's drop saw claims breaking outside their recent 262,000-294,000 range.

The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, fell 2,500 to 267,500 last week, the lowest level since late October.

Claims are being watched for any sign of labour market weakness following a recent massive stock market sell-off that caused financial market conditions to tighten amid fears the economy was heading into recession.

So far, the labour market remains on strong footing, with nonfarm payrolls increasing by 242,000 jobs in February and the unemployment rate holding at an eight-year low of 4.9 per cent.

The recession fears have also been soothed by strong consumer spending at the start of the year, as well as signs of some stabilization in the troubled manufacturing sector.

The claims report showed the number of people still receiving benefits after an initial week of aid dropped 32,000 to 2.23 million in the week ended Feb 27. The four-week average of the so-called continuing claims fell 4,500 to 2.25 million.

REUTERS