U.S. jobless claims hold steady at 4-year low

WASHINGTON Thu Feb 23, 2012 7:44pm IST

People talk with a job recruiter (R) while they attend the ''JobEXPO'' job fair in New York, January 25, 2012. REUTERS/Eduardo Munoz/Files

People talk with a job recruiter (R) while they attend the ''JobEXPO'' job fair in New York, January 25, 2012.

Credit: Reuters/Eduardo Munoz/Files

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WASHINGTON (Reuters) - New U.S. claims for unemployment benefits were unchanged last week, holding at the lowest level since the early days of the 2007-2009 recession and giving a fresh sign the battered labour market is healing.

Workers filed 351,000 initial claims for state unemployment benefits, the Labor Department said on Thursday.

"It's broadly in line with recent U.S. data showing a gradually improving economic backdrop," said Omer Esiner, a market analyst at Commonwealth Foreign Exchange in Washington.

The last two weekly readings have been the lowest since March 2008.

With weekly claims approaching levels last seen before the recession that began in December 2007, economists say employers might be close to ending a long cycle of heavy layoffs, laying the ground for more hiring.

Already, the jobless rate has fallen sharply, dropping to 8.3 percent in January from 9.1 percent in August.

Job gains have exceeded 200,000 for two straight months, and the jobless claims data from last week was taken from the sample period of the February payroll report, which could point to ongoing improvements in hiring.

The U.S. Federal Reserve has left benchmark interest rates near zero since December 2008 to coax companies into hiring, and the recent improvement in the labor market has dampened expectations of further monetary stimulus.

RISKS ABOUND

Strong jobs and factory data have eased worries U.S. economic growth could slow sharply early this year, but risks of a worsening of Europe's debt crisis and rising oil prices still threaten the recovery.

The European Commission said the euro zone's economy is heading into its second recession in just three years, while the wider EU will stagnate.

A Labor Department official said there was nothing unusual in last week's initial claims data, although claims were estimated for three states, including California. Economists polled by Reuters had forecast initial claims would rise to 354,000 last week.

The four-week moving average for new claims, a measure of labor market trends, fell 7,000 to 359,000 - also the lowest since March 2008.

Prices for U.S. government debt extended losses following the data, while futures for the Standard & Poor's stock index briefly pared gains.

The number of people still receiving benefits under regular state programs after an initial week of aid fell 52,000 to 3.392 million in the week ended February 11 from a revised reading of 3.444 million. The drop left continuing claims at their lowest level since August 2008.

Economists had forecast continuing claims falling to 3.460 million from a previously reported 3.426 million.

The improvements in the labor market have helped President Barack Obama's reelection bid because voters consider jobs to be the most important issue in the November presidential election.

But considerable slack still remains in the jobs market, with 23.8 million Americans either out of work or underemployed. There are no job openings for nearly three out of every four unemployed.

A total of 7.503 million people were claiming unemployment benefits during the week ended February 4 under all programs, down 178,619 from the prior week.

(Editing by Andrea Ricci)

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