* Jobless claims fall 27,000 last week
* Continuing claims fall to 4-1/2-year low
* Data suggests better labor market, but economists cautious
By Lucia Mutikani
WASHINGTON, Feb 14 (Reuters) – The number of Americans
filing new claims for unemployment benefits fell more than
expected last week, offering hope the sluggish labor market
recovery may have picked up a step.
Initial claims for state jobless aid dropped 27,000 to a
seasonally adjusted 341,000, the Labor Department said on
Thursday. The prior week’s claims figure was revised to show
2,000 more applications were received than previously reported.
Last week’s drop in claims exceeded economists’ expectations
for only a 6,000 decline and pushed first-time filings down to
the lower end of their range for this year.
“It does seem as if claims are trending down a bit. We think
payroll growth will pick up this year and this sort of gradual
downtrend in claims seems consistent with that,” said Sam
Coffin, an economist at UBS in New York.
But some economists said a blizzard that slammed the East
Coast late last week and difficulties smoothing out the data for
seasonal fluctuations could have artificially depressed claims.
While they were encouraged by the decline, they urged
caution against reading too much into the data.
“Claims may not be giving a reliable signal about the labor
market,” said Daniel Silver, an economist at JPMorgan in New
York.
A Labor Department analyst said claims for Illinois and
Connecticut, one of the states hardest hit by the snowstorm, had
been estimated. He said given that most claims are filed online,
the blizzard appeared to have little effect on the broader data.
U.S. financial market were little moved by the data as
investors focused on news the euro zone economy slipped deeper
into recession in the fourth quarter. Stocks on Wall Street were
little changed, while the dollar and U.S. Treasury debt prices
rose.
LAYOFFS HAVE EBBED
The data offered more evidence that U.S. companies are no
longer aggressively laying off workers. However, they still
appear to be in no hurry to step-up hiring against the backdrop
of still lackluster demand.
The economy has struggled to grow much more than 2 percent
since the 2007-09 recession ended, and the jobless rate rose 0.1
percentage point to 7.9 percent in January.
High unemployment prompted the Federal Reserve last year to
launch an open-ended bond buying program that it said it would
keep up until it saw a substantial improvement in the outlook
for the labor market.
It also has committed to hold interest rates near zero until
unemployment reaches 6.5 percent, provided inflation does not
threaten to push over 2.5 percent.
Job gains averaged 181,000 per month in 2012, far less than
the at least 250,000 that economists say is needed to
significantly reduce the ranks of unemployed.
“The rate of job losses has slowed in early 2013, which is
consistent with a modest pickup in net job creation,” said John
Ryding, chief economist at RDQ Economics in New York.
“Our projection for 2013 is that the average pace of job
growth will be around 175,000 per month and we judge this drop
in claims to be broadly consistent with this forecast.”
Last week, the four-week moving average for new claims, a
better measure of labor market trends, rose 1,500 to 352,500.
The average had approached a five-year low in the prior week.
The number of people still receiving benefits under regular
state programs after an initial week of aid dropped 130,000 to
3.11 million in the week ended Feb. 2.
That was the lowest level since July 2008 and could be a
function of people either securing jobs or simply exhausting
their benefits. So-called continuing claims had hovered around
3.2 million since late November.
