Labor Department: Jobless Claims Fell to 367K

Applications for unemployment insurance dropped by 12,000 to 367,000 last week, Labor Department figures showed today in Washington, signaling continued improvement in the labor market.

Hot Feature: House Votes to Extend Obama’s Pay Freeze for Federal Employees

Today’s report indicates that U.S. companies are slowing the pace of firing, and economists are forecasting that tomorrow’s Labor Department report will show employers boosted payrolls in January and the jobless rate held at an almost three-year low.

“We are starting to move to the next phase of the labor market expansion, where hiring will increasingly overshadow layoffs,” said Richard DeKaser, deputy chief economist at Parthenon Group Inc. in Boston, who forecast 368,000 initial claims.

Jobless claims for the previous week, initially reported at 377,000, were upwardly revised today to 379,000. Another Labor Department report today showed worker productivity rose at a slower pace in the fourth quarter than in the third, indicating that employers have squeezed as much efficiency as possible out of their existing workforces, and will need to add jobs if they are to continue growing.

The four-week moving average for jobless claims, considered a better indicator of overall employment trends, fell to 375,750 in the week ended January 28, from 377,750 the previous week. Last week’s was the second-lowest average since 2008, after a 374,000 reading in the last week of December.

The number of people continuing to receive jobless benefits was also reported to have declined by 130,000 in the week ended January 21 to 3.44 million, the fewest since September 2008.

Those continuing claims numbers do not include the number of American receiving extended benefits under federal programs, which increased by about 43,100 to 3.5 million in the week ended January 14.

The unemployment rate among people eligible for benefits, which closely tracks the jobless rate, fell to 2.7 percent from 2.8 percent.

Don’t Miss: Merkel Asks China to Help with Euro, Iran

To contact the reporter on this story: Emily Knapp at staff.writers@wallstcheatsheet.com

To contact the editor responsible for this story: Damien Hoffman at editors@wallstcheatsheet.com