US jobless claims tumble to three-year low

WASHINGTON: New claims for US unemployment benefits fell sharply last week to the lowest level in more than three years, official data showed Thursday, confirming recent signs of healing in the labor market.

Initial jobless claims dropped to 352,000 in the week ending January 14, a decline of 50,000 from the prior week's revised figure of 402,000, the Labor Department said.

It was the lowest number of new claims, an indicator of layoffs, since April 2008, when the economy was a few months into recession.

The latest weekly reading marked a return to an overall declining trend since claims were stuck above the 400,000 level in October.

The four-week moving average, which helps to smooth week-to-week volatility, fell to 379,000, down by 3,500 claims from the previous week.

"One week is not a trend but this continues a clear downshift in claims which emerged towards the end of last year when businesses realized that the meltdown in demand they feared, in the wake of the drop in consumers' confidence, had not happened," said Ian Shepherdson, chief US economist at High Frequency Economics.

The US unemployment rate fell for the fourth straight month in December, to 8.5 percent, and jobs creation picked up, with a net 200,000 positions added as the economy slowly recovers from the 2007-2009 recession. (AFP)