SHAFAQNA – The number of Americans filing new claims for unemployment benefits fell last week and job cuts declined for a second straight month in December, adding to signs of a strengthening labor market.
Initial claims for state unemployment benefits slipped by 4,000 to a seasonally adjusted 294,000 for the week ended Jan. 3, the Labor Department said on Thursday.
While that was a bit less than Wall Street’s expectations of a drop to 290,000, the trend in claims remained consistent with a steadily tightening labor market. At current levels, claims probably have little room to fall further.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, dipped by 250 to 290,500 last week.
It has remained below 300,000 for 17 straight weeks.
U.S. stock futures held gains and U.S. Treasuries trimmed losses after the data. The dollar was up against a basket of currencies.
In a separate report, global outplacement consultancy Challenger, Gray & Christmas said the number of job cuts announced by U.S. employers fell 9.2 percent in December.
For the whole of 2014, employers announced a total of 483,171 job cuts. That was 5 percent fewer than in 2013 and the smallest number since 1997.
“This bodes well for job seekers who will not only find more employment opportunities in 2015, but will enjoy increased job security once they are in those new positions,” said John A. Challenger, chief executive officer of Challenger, Gray & Christmas.
Employment data released so far point to another month of solid job gains in December and support views of a strong labor market this year.
The strengthening job market backdrop could bring the Federal Reserve a step closer to raising its short-term interest rate, which it has kept near zero since December 2008.
In minutes from its Dec. 16-17 policy meeting published on Wednesday, the U.S. central bank said the labor market had improved further and added that slack was continuing to diminish.
Reports on Wednesday showed a jump in small business hiring and another month of solid gains in private payrolls.
A survey of consumers published last week by the Conference Board showed households in December were more upbeat than they had been in several years about the prospect of getting a job.
The government is expected to report on Friday that nonfarm payrolls rose by 240,000 in December after surging by 321,000 in November. That would mark the 11th consecutive month of job gains above 200,000, the longest stretch since 1994.
Overall employment gains in 2014 are expected to be the largest since 1999. The unemployment rate is forecast slipping one-tenth of a percentage point to 5.7 percent in December, which would be the lowest since June 2008.
Thursday’s claims report showed the number of people still receiving benefits after an initial week of aid increased by 101,000 to 2.45 million in the week ended Dec. 27.
The four-week average of the so-called continuing claims fell by 17,000 to 2.40 million.