U.S. jobless claims fall as labour market firms

Planned layoffs plunge in December
By Lucia Mutikani
|hrreporter.com|Last Updated: 01/09/2014

WASHINGTON (Reuters) — The number of Americans filing new claims for unemployment benefits last week fell slightly more than expected, pointing to an economy that was continuing to gain steam.

Initial claims for state unemployment benefits declined 15,000 to a seasonally adjusted 330,000, the Labor Department said on Thursday.

Economists polled by Reuters had expected first-time applications to fall to 335,000 for the week ended Jan. 4. The four-week moving average for new claims fell 9,750 to 349,000.

U.S. stock index futures and Treasury prices held their gains after the data, while the dollar slightly extended gains versus the yen and pared losses against the euro.

A separate independent report showed planned layoffs at U.S. firms plunged by 32 per cent in December to their lowest level in more than 13 years.

Employers announced 30,623 layoffs last month, down from 45,314 in November, according to the report from consulting firm Challenger, Gray & Christmas. December's reading was the lowest since June 2000.

From employment to consumer spending and industrial production, the economy appears poised for sustained strong growth through 2014 after false starts in the prior years.

That increasingly brightening outlook gave the Federal Reserve confidence in announcing last month that it would reduce its monthly $85 billion bond buying program by $10 billion starting in January.

With the run of fairly strong data continuing, economists believe the U.S. central bank could announce additional reductions in its bond purchases at the Jan. 28-29 meeting.

In an interview with Time magazine released on Thursday, incoming Fed Chair Janet Yellen said she was "hopeful" that economic growth would accelerate in 2014 to reach 3 percent or more, with inflation moving up toward the central bank's target.

Claims volatile

While jobless claims have been extremely volatile around the holiday season, they are still largely consistent with other labor market indicators that have painted an upbeat picture of the jobs market and the overall economy.

Last week's data has no bearing on the government's closely watched employment report for December.

The Labor Department is expected to report on Friday that non-farm payrolls increased by 196,000 last month after gaining 203,000 in November, according to a Reuters poll of economists.

The unemployment rate is forecast to be steady at a five-year low of seven per cent.

There is, however, a risk of a stronger number in the wake of reports on Wednesday showing the fastest pace of private hiring in 13 months in December and small businesses creating the most jobs in nearly eight years.

The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid rose 50,000 to 2.87 million in the week ended Dec. 28.

A total of 4.19 million people were receiving benefits under all programs in the week ended Dec. 21. With benefits for more than a million long-term unemployed Americans having expired on Dec. 28, that figure should decline sharply in the weeks ahead.

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