The number of Americans filing new applications for claiming unemployment benefits dropped unexpectedly last week, indicating the continuous expansion of the labor market at a solid clip even when the pace of economic growth has stalled.
The Labor Department report on Thursday showed that the initial claims for state unemployment benefits declined 20,000 to a seasonally adjusted 268,000 for the week that ended March 28.
Sustained strength of the labor market supports views that the significant slowdown in the activity is probably temporary.
The momentum from the economy during the first quarter was sucked by a host of factors that ranged from a strong dollar to bad weather conditions.
This was the lowest level recorded since January this year and confounded the expectations of the economists for an increase to 285,000.
The four-week moving average of jobless claims, which is considered as a better measurement of the trends of the country’s labor market as it irons out the week-to-week volatility, tumbled 14,750 to 285,500 last week.
The bullish tone of the US labor market was also underlined by the report that more and more people are coming off the jobless benefits rolls.
The number of people still receiving jobless benefits after an initial week of aid declined 88,000 to 2.33 million in the week that ended March 21. This was the lowest reading since December 2000.
The strong labor market should keep the Federal Reserve Bank on track to commence raising interest rates this year.