WASHINGTON, Dec 24, (Agencies): The number of Americans filing for unemployment benefits fell more than expected last week, nearing a 42-year low as labor market conditions continued to tighten in a boost to the economy.
Initial claims for state unemployment benefits dropped 5,000 to a seasonally adjusted 267,000 for the week ended Dec 19, not far from levels last seen in late 1973, the Labor Department said on Thursday.
Economists polled by Reuters had forecast claims dipping to 270,000 in the latest week. Claims have been below 300,000, a threshold associated with a buoyant labor market, for 42 consecutive weeks. That is the longest stretch since the early 1970s.
However, some of the decline last week could be attributed to difficulties adjusting the figures during the holidays.
Still, labor market strength is helping to underpin consumer spending, supporting the economy as it deals with the headwinds of a strong dollar, slowing global growth, spending cuts by energy firms and an inventory overhang.
The four-week moving average of claims, considered a better measure of labor market trends as it strips out week-to-week volatility, rose 1,750 to 272,500 last week.
Prices of longer-dated US government debt rose after the data, while the dollar pared some losses. US stock index futures were slightly higher.
A Labor Department analyst said there were no special factors influencing the data and that no states had been estimated.
The claims report showed the number of people still receiving benefits after an initial week of aid declined 47,000 to 2.20 million in the week ended Dec 12. The four-week moving average of the so-called continuing claims rose 10,000 to 2.21 million.
The continuing claims data covered the period during which the government surveyed households for December’s unemployment rate. Continuing claims rose 42,250 between the November and December survey periods, suggesting little change in the jobless rate, which was at a 7-1/2-year low of 5.0 percent last month.
The unemployment rate is in a range many Federal Reserve officials see as consistent with full employment. It has dropped seven-tenths of a percentage point this year.
In another report, what Fed rate hike?
One week after the Federal Reserve raised short-term interest rates from record lows, the average on a 30-year fixed-rate mortgage went the other way: It dipped to 3.96 percent from 3.97 percent last week, mortgage giant Freddie Mac says.
The drop is a reminder that the Fed has only an indirect influence on long-term mortgage rates, which more closely track the yield on the 10-year US Treasury note. And that rate, in turn, tends to stay down as long as inflation remains low and investors keep buying Treasurys. The 10-year Treasury yield has declined slightly since the Fed’s hike last week.
The 30-year mortgage rate was a bit lower a year ago — 3.83 percent. But many analysts expect it to stay historically low for months.