US jobless rate hits a 15-year low following holiday

The number of Americans filing new claims for unemployment benefits tumbled last week to its lowest level in nearly 15 years, adding to bullish signals on the labour market.

Though the decline probably exaggerates the jobs market’s strength given a holiday-shortened week, yesterday’s report suggested the economy was fairly healthy and weathering weakening global growth.

“Claims are a welcome shot in the arm for those believing the economy is strong,” said Chris Rupkey of MUFG Union Bank in New York. “The US remains an oasis of prosperity in the world and will continue to do so.”

Initial claims for state unemployment benefits fell 43,000 to a seasonally adjusted 265,000 for the week ended January 24, the lowest level since April 2000. It was the biggest weekly decline since November 2012.

The drop exceeded economists’ expectations for a fall to only 300,000, but last week also included the Martin Luther King holiday, which means fewer claims were likely processed.

The fall unwound the prior weeks’ increases, which had pushed claims above the key 300,000 threshold.

Economists had largely dismissed that rise as “noise”, given difficulties adjusting the data for seasonal fluctuations at the start of the year.

The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, fell 8,250 last week to 298,500.

Reuters