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U.S. Weekly Jobless Claims Show Much Steeper Than Expected Drop

U.S. Weekly Jobless Claims Show Much Steeper Than Expected Drop
2/28/2013 9:39 AM ET

In an upbeat sign for the job market, the Labor Department released a report on Thursday showing that first-time claims for U.S. unemployment benefits fell by much more than anticipated in the week ended February 23rd.

The report said initial jobless claims dropped to 344,000, a decrease of 22,000 from the previous week's revised figure of 366,000.

Economists had expected jobless claims to edge down to 360,000 from the 362,000 originally reported for the previous week.

Joel L. Naroff, President and Chief Economist at Naroff Economic Advisors, said, "The large decline in jobless claims followed a large increase but when you consider the longer-term pattern, the trend is still slightly down."

The Labor Department said its less volatile four-week moving average dipped to 355,000, a decrease of 6,750 from the previous week's revised average of 361,750.

Continuing claims, a reading on the number of people receiving ongoing unemployment assistance, also fell to 3.074 million in the week ended February 16th from the preceding week's revised level of 3.165 million.

The four-week moving average of continuing claims slid to 3,155,000, a decrease of 35,500 from the preceding week's revised average of 3,190,500.

Next Friday, the Labor Department is scheduled to release its closely watched monthly report on the employment situation.

Capital Economics recently released a research note indicating that payrolls are expected to increase by about 175,000 in February, which the firm noted would leave employment growing at much the same pace as in recent months.

"Without a meaningful acceleration in job growth, however, the recent resurgence in earnings growth is unlikely to be sustained," Capital Economics said.

The Labor Department said non-farm payroll employment increased by 157,000 jobs in January following an upwardly revised increase of 196,000 jobs in December.

Economists had been expecting employment to increase by about 165,000 jobs compared to the addition of 155,000 jobs originally reported for the previous month.

Along with the upward revision to the December job numbers, the report also showed that the increase in jobs in November was upwardly revised to 247,000 from 161,000.

Despite the continued job growth, the unemployment rate unexpectedly edged up to 7.9 percent in January from 7.8 percent in December. The increase surprised economists, who had expected to unemployment rate to dip to 7.7 percent.

by RTT Staff Writer

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