US jobless rate falls as labour market gathers steam

The number of Americans filing new claims for unemployment benefits fell more than expected last week, offering fresh evidence that the labour market was gathering steam.

Initial claims for state unemployment benefits dropped 21,000 to a seasonally adjusted 283,000 for the week ended last Saturday, the Labor Department said.

A Labor Department analyst said the department had estimated the claims data for Tennessee, where offices were closed on Tuesday because of bad weather.

A shortened work week due to Monday’s President’s Day holiday could have contributed to the unexpectedly bigger decline in claims but the underlying trend continues to point to a strengthening market.

The four-week moving average of claims, considered a better measure of labour market trends as it irons out week-to-week volatility, fell 6,500 to 283,250 last week.

The US economy has added more than a million jobs over the past three months, a performance last seen in 1997. The number of job seekers for every open position hit its lowest level since 2007 in December.

Most economists believe that tightening labour market conditions will trump the Federal Reserve’s concerns over low inflation, allowing the US central bank to raise rates in June.