Jobless claims data suggests labor market strength

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Hundreds of job seekers wait in line with their resumes to talk to recruiters (R) at the Colorado Hospital Association health care career fair in Denver April 9, 2013. Credit: Reuters/Rick Wilking

Hundreds of job seekers wait in line with their resumes to talk to recruiters (R) at the Colorado Hospital Association health care career fair in Denver April 9, 2013.
Credit: Reuters/Rick Wilking

WASHINGTON - The number of Americans filing new claims for unemployment benefits fell more than expected last week, pointing to resilience in the labor market despite belt-tightening by Washington.

The improving job market tone is helping to prop up housing, with rising home prices keeping domestic consumption supported. But tighter fiscal policy as the government tries to slash its bloated budget deficit is dampening factory activity.

Initial claims for state unemployment benefits dropped 23,000 to a seasonally adjusted 340,000 last week, the Labor Department said on Thursday. Economist had expected claims to fall to 345,000.

The drop unwound most of the prior week's jump and suggested employers were not laying off workers in response to fiscal austerity, especially the $85 billion in across-the-board government spending cuts.

"The evidence from jobless claims suggests that layoffs have slowed, which hints at faster net job creation," said John Ryding, chief economist at RDQ Economics in New York.

The labor market is being closely watched by the Federal Reserve as debate heats up over the future of its expansive monetary stimulus.

Fed Chairman Ben Bernanke told lawmakers that a decision to scale back the $85 billion in bonds the U.S. central bank is buying each month could come at one of its "next few meetings" if the economy appeared set to maintain momentum.

Source: (Reuters) By Lucia Mutikani | Thu May 23, 2013 11:28am EDT
[button-black text="FULL STORY" Full Story" url="http://www.reuters.com/article/2013/05/23/us-usa-economy-idUSBRE94M0K220130523"]

 
 

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