The number of new people claiming jobless benefits in the United States fell last week to the lowest level in almost four months, an unexpected sign of relief in the labour market.
New claims fell by a seasonally adjusted 24,000 to 398,000 in the week ended July 23, the U.S. Labor Department said Thursday. The prior week's claims figure was revised to 422,000, up from an originally reported 418,000.
The number of new claims fell below 400,000 for the first time since the week of April 2.
Economists generally think the economy is adding more jobs than it is shedding once the weekly claims figure falls below that key level.
Economists surveyed by Dow Jones Newswires had forecast claims to remain unchanged.
The four-week moving average of new claims, considered a more reliable indicator of the labor market's recent performance, also fell last week, by 8,500 to 413,750.
Still, the labour market remains soft across many sectors. Last week networking giant Cisco Systems Inc. said it would lay off 6,500 people, defense and aerospace company Lockheed Martin Corp.'s said it would eliminate up to 6,500 positions, and investment bank Goldman Sachs Group Inc. said it would cut at least 1,000 jobs.
In May and June, the economy created only 43,000 jobs, according to the Labor Department's latest monthly report on non-farm payrolls. The Federal Reserve predicts the unemployment rate will remain high into 2012.
The U.S. Labor Department Thursday said the number of continuing unemployment benefit claims -- those drawn by workers for more than a week -- decreased by 17,000 to 3,703,000 in the week ended July 16. Continuing claims are reported with a one-week lag.
The unemployment rate for workers with unemployment insurance fell to 2.9% in the week ending July 16, down from 3.0%.
The state-by-state breakdown, which is also reported with a lag, showed the biggest drop in claims the week ended July 16 was in New York, with a decrease of 17,377 due to fewer layoffs in education and transportation. The largest increase in claims that week was in California, up by 20,813 due largely to administrative factors related to the July 4 holiday.
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