The number of Americans applying for unemployment benefits fell sharply last week, a positive sign that the U.S. job market is slowly improving.
The U.S. Labour Department said Thursday that applications dropped by 34,000 to 388,000 in the week ending Dec. 25. That was the lowest figure since the week of July 12, 2008.
Applications for U.S. unemployment benefits peaked during the recession at 651,000 in March 2009.
The four-week moving average was 414,000, a decrease of 12,500 from the previous week's revised average of 426,500. Economists pay closer attention to the four-week figure because it smooths out fluctuations.
The surprisingly steep slide in jobless claims bodes well for the US economy, which has been dogged by persistently high unemployment - of 9.8 per cent in its latest reading in November - and a slow pace of job creation in the private sector.
It suggests that businesses are no longer firing workers as aggressively as they were earlier in the recovery, as they seek to keep their workforce intact in anticipation of greater demand. It might also indicate greater confidence in the country’s economic prospects following the $858bn compromise tax deal deal that was approved by Congress and signed by President Barack Obama before the Christmas holiday.
By: David Thomson