First Time US Jobless Claims Falls To 358,000

A report released by the U.S. Department of Labor (DoL) on Thursday showed first-time unemployment claims fell last week unexpectedly by 15,000 to 358,000.

The better-than-expected data were consistent with a Labor Department report last week that showed nonfarm payrolls climbed by 243,000 jobs in January, the biggest gain in nine months.

Some companies have recently announced they are hiring workers, including car makers Chrysler and Toyota.

The four-week moving average of new jobless claims dropped sharply last week, coming in at its lowest since April 2008.

The closely watched number, which smooths out volatile weekly figures, decreased by 11,000 to 366,250. The four-week average has remained below the 400,000 mark since November, a good sign as economists traditionally say claims must remain consistently below that level for the economy to add jobs.

Job creation is vital to economic growth because it puts money into people’s pockets and spurs spending. The economy is expected to grow modestly this year, with unemployment projected in a range of 8.2 percent to 8.5 percent.

Aside from historically high joblessness, the housing sector continues to be weak, with prices falling in some markets and making people feel insecure about their finances.

Thursday’s report showed the number of continuing unemployment benefit claims–those drawn by workers for more than a week–rose by 64,000 to 3,515, 000 in the week ended January 28. Continuing claims are reported with a one-week lag.

Despite the increase, the four-week average fell and was at its lowest since the week of September 20, 2008.