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U.S. Weekly Jobless Claims Unexpectedly Drop To 358,000

U.S. Weekly Jobless Claims Unexpectedly Drop To 358,000

First-time claims for U.S. unemployment benefits showed a notable decrease in the week ended February 4th, according to a report released by the Labor Department on Thursday, with the data likely to add to recent optimism about the labor market.

The report showed that initial jobless claims fell to 358,000 from the previous week's revised figure of 373,000. Economists had been expecting jobless claims to edge up to 370,000 from the 367,000 originally reported for the previous week.

The Labor Department also said that the less volatile four-week moving average fell to 366,250 from the previous week's revised average of 377,250.

With the decrease, the four-week moving average extended a downward trend, falling to its lowest level since April of 2008.

On the other hand, continuing claims, a reading on the number of people receiving ongoing unemployment assistance, rose to 3.515 million in the week ended January 28th from the preceding week's revised level of 3.451 million.

The four-week moving average of continuing claims still fell to 3.498 million from the preceding week's revised average of 3.531 million.

Peter Boockvar, equity strategist at Miller Tabak, said, "As seen with Friday's payroll figure, the labor market continues to improve but we all watch for its sustainability in light of growing overseas challenges."

Last Friday, the Labor Department released a report showing that much stronger than expected job growth in the month of January pushed the unemployment rate down to its lowest level in almost 3 years.

The Labor Department report showed that non-farm payroll employment jumped by 243,000 jobs in January following a revised increase of 203,000 jobs in December. Economists had expected employment to increase by about 140,000 jobs.

With the stronger than expected job growth, the unemployment rate unexpectedly fell to 8.3 percent from 8.5 percent in the previous month.

The drop pulled the unemployment rate down to its lowest level since a matching number in February of 2009. Economists were expecting the unemployment rate to hold steady at 8.5 percent.

by RTT Staff Writer

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