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U.S. jobless claims drop, point to stronger labor market

Published 10/02/2014, 10:57 AM
© Reuters Job seekers fill out job applications for recruiters as they attend a job fair in New York

By Jason Lange

WASHINGTON (Reuters) - The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, a sign the labor market may be tightening.

Still, other data on Thursday showed weaker factory orders in August even after stripping out volatile transportation figures, a darker signal for future growth in manufacturing.

Initial claims for state unemployment benefits dropped 8,000 to a seasonally adjusted 287,000 in the week ended Sept. 27, the Labor Department said. Economists polled by Reuters had forecast a rise in new claims.

Claims have fallen steadily since the nation emerged from the 2007-09 recession and are currently lower than they were before the country's economic crisis began. Indeed, the current level is only 8,000 above the 14-year low reached in July.

Thursday's data is "consistent with the continued, solid performance in the labor market," said Keith Hembre, chief economist at Nuveen Asset Management in Minneapolis.

The claims data will have no bearing on Friday's government report on monthly employment during September because the hiring survey was conducted earlier in the month. Economists expect companies stepped up the pace of hiring last month, adding 215,000 workers to payrolls.

Separate data showed U.S. small businesses hiring workers at the fastest pace in eight months, further evidence of strength in the labor market.

The National Federation of Independent Business said its monthly survey of its members found they added an average of 0.24 workers per firm last month, on a seasonally adjusted basis.

The four-week moving average of jobless claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 4,250 to 294,750, just above an 8-1/2 year low hit in early August.

The Labor Department said there were no special factors influencing the state level data.

U.S. stock prices were flat, holding at levels reached in a Wednesday slump that was sparked by news that a patient was diagnosed with Ebola in the United States.

A separate report from the Commerce Department showed new orders for U.S. factory goods posted their biggest decline on record in August, although the 10.1 percent drop was payback for an aircraft-driven jump a month earlier.

Stripping out transportation orders which were depressed by a plunge in the volatile aircraft component, new orders were down a more modest 0.1 percent.

© Reuters. Job seekers fill out job applications for recruiters as they attend a job fair in New York

The U.S. manufacturing sector continues to expand, although growth may be moderating. The Institute for Supply Management said on Wednesday that its gauge of factory activity showed slower growth in September.

(Reporting by Jason Lange; Additional reporting by Richard Leong in New York; Editing by Andrea Ricci)

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