Jobless claims hit nine month low
WASHINGTON (Reuters) – The number of U.S. workers filing new claims for jobless insurance fell more-than-expected to a nine-month low last week, data showed, suggesting the labor market was healing despite a setback in September.
Initial claims for state unemployment benefits dropped 33,000 to a seasonally adjusted 521,000 in the week ended October 3, the lowest level since early January, the Labor Department said on Thursday.
Analysts polled by Reuters had forecast new claims slipping to 540,000 last week from a previously reported 551,000. A Labor Department official said seasonal factors expected a decline in new claims at the end of a quarter and a rise at the start of a new quarter.
The U.S. stock index futures added to gains and the U.S. dollar pared losses on the stronger-than-expected data, while yields on U.S. government debt rose.
“The labor market is improving, but rather slowly,” said Cary Leahey, economist at Decision Economics in New York. “Both the initial and continuing claims numbers suggest that October ought to be a better month for payrolls than September.”
The claims report will help to calm fears of a deterioration in the labor market after data last week showed U.S. employers cut more jobs in September than had been anticipated by the market.
Data suggest the economy started growing in the third quarter after a recession that started in December 2007, but a persistently weak labor market is casting doubts over the strength and sustainability of that recovery.
The unemployment rate rose to 9.8 percent in September, a 26-year high. Economists reckon the Federal Reserve will probably refrain from raising interest rates, currently near zero, until the jobless rate peaks.