Market sentiment was given a lift today after U.S. jobless claims data fell to a near four-year low, providing further evidence of an improving U.S. labor market.
The Labor Department reported today that the number of Americans who filed for unemployment in the week ending February 11, decreased by 13,000 to a seasonally adjusted 348,000, the lowest level since March 2008. The figures beat forecasts for claims to rise to 368,000. Hiring is generally viewed as improving when weekly claims drop below the 400,000 mark.
Initial claims are a good gauge of whether layoffs are rising or declining. They’ve fallen steadily since last summer, an indication that fewer people are losing their jobs and more are finding work. As a result, the unemployment rate has declined to 8.3% from 9.1% last August, though it still remains quite high at this stage of an economic recovery.
Continuing claims dropped by 100,000 to a seasonally adjusted 3.43 million in the week ended February 4. (Note: Continuing claims are reported with a one-week lag).
Meanwhile, the four-week average of claims also fell, by 1,750 to 365,250, keeping it near a four-year low. This monthly average of claims smoothes out seasonal quirks and provides a more accurate view of labor-market trends.