New US claims for unemployment benefits dropped to a 2.5 year-year low last week, offering assurance that the labour market was strengthening despite January's poor jobs numbers.
Initial claims for state unemployment benefits fell 36,000 to a seasonally adjusted 383,000, the lowest since early July 2008, the Labour Department said today.
Economists polled by Reuters had forecast claims slipping to 410,000. The prior week's figure was revised up to 419,000, from the previously reported 415,000.
"Anecdotally, we do hear that there is some improvement on the jobs front and this is another indication of that," said Tim Ghriskey, chief investment officer at Solaris Asset Management in New York.
US stock index futures slightly pared losses, while government bond futures extended losses. The dollar extended gains versus the yen and the euro.
The data, coming on the heels of Friday's report showing the economy created a paltry 36,000 jobs in January, added to other employment indicators that have pointed to a gain in momentum in the labor market.
Initial claims breached the 400,000 mark and economists say a sustained move below that level would signal strong job growth.
A Labour Department official said claims were still unwinding some of the weather effects that pushed up applications last month.
The four-week moving average of unemployment claims - a better measure of underlying trends - dropped 16,000 to 415,500 last week.
The number of people still receiving benefits under regular state programs after an initial week of aid declined 47,000 to 3.89 million in the week ended Jan. 29 from an upwardly revised 3.94 million the prior week.
Economists had expected so-called continuing claims to fall to 3.90 million from a previously reported 3.93 million.
The number of people on emergency unemployment benefits increased 100,366 to 3.76 million in the week ended January 22nd, the latest week for which data is available. A total of 9.4 million people were claiming unemployment benefits during that period under all programs.
Reuters
