Jobless claims fall as US labour market strengthens

The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, suggesting the labour market continued to strengthen.

Other data yesterday showed factory activity in the mid-Atlantic region braked sharply in December, but that followed hefty gains in the prior month and analysts said manufacturing remained on solid ground.

“The economy continues to run hard as it finishes out the year,” said Chris Rupkey, chief financial economist at MUFG Union Bank in New York.

Initial claims for state unemployment benefits dropped by 6,000 to a seasonally adjusted 289,000 for the week ended December 13, the labour department said. Wall Street had expected claims to rise to 295,000.

The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, slipped by 750 to 298,750.

The data came a day after the Federal Reserve offered an upbeat assessment of the labour market and the broader economy, and signalled it could start raising interest rates next year.

The Federal Reserve, which has kept its short-term interest rate near zero since December 2008, lowered its unemployment rate forecast on Wednesday. Many economists expect the first rate hike in mid-2015.

*Reuters