WASHINGTON -- The number of Americans filing new claims for unemployment benefits fell last week to the lowest level in nearly a month, a hopeful sign for the labor market.
Initial claims for state unemployment benefits decreased 42,000 to a seasonally adjusted 338,000, the Labor Department said Thursday.
While recent data on claims have been clouded by seasonal volatility around the winter holiday period, Thursday's report showed claims in a range that supports expectations for faster economic growth next year.
"With labor markets on the mend and consumer confidence on the rise, we look for broader economic improvement to continue pushing claims [lower]," said Gennadiy Goldberg, an analyst at TD Securities (TD) in New York.
New jobless claims have trended higher since September and are now roughly where they were during the early days of the 2007-09 recession. %VIRTUAL-article-sponsoredlinks%Economists, however, say the level of claims is still consistent with job growth, and other labor market indicators have pointed to a strengthening labor market.
The four-week moving average for new claims, which irons out week-to-week volatility, increased 4,250 to 348,000.
"The underlying trend remains favorable," said Ryan Sweet, an economist at Moody's Analytics in West Chester, Pa. "We will be able to muster stronger job growth in 2014."
The claims data appeared to have little impact on prices for U.S. stocks and bonds, which were little changed in thin holiday-season trading.
Citing an improving labor market, the Federal Reserve earlier this month announced it would reduce its monthly $85 billion bond buying program by $10 billion starting in January.
Payrolls increased solidly in October and November. The unemployment rate dropped to a five-year low of 7 percent in November.
A Labor Department analyst said no states had been estimated, but noted that claims were still in a period of volatility related to the holidays. The volatility is caused by the difficulty inherent in adjusting weekly data for seasonal factors like retailers and schools adjusting the sizes of their staff for the winter season.
Claims for the prior week were revised to show 1,000 more applications received than previously reported. Economists polled by Reuters had expected first-time applications to fall to 345,000 last week.
The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid rose 46,000 to 2.923 million in the week ended Dec. 14.
9 Numbers That'll Tell You How the Economy's Really Doing
Weekly Jobless Claims Fall in Positive Sign for Labor Market
The gross domestic product measures the level of economic activity within a country. To figure the number, the Bureau of Economic Analysis combines the total consumption of goods and services by private individuals and businesses; the total investment in capital for producing goods and services; the total amount spent and consumed by federal, state, and local government entities; and total net exports. It's important, because it serves as the primary gauge of whether the economy is growing or not. Most economists define a recession as two or more consecutive quarters of shrinking GDP.
The CPI measures current price levels for the goods and services that Americans buy. The Bureau of Labor Statistics collects price data on a basket of different items, ranging from necessities like food, clothing and housing to more discretionary expenses like eating out and entertainment. The resulting figure is then compared to those of previous months to determine the inflation rate, which is used in a variety of ways, including cost-of-living increases for Social Security and other government benefits.
The unemployment rate measures the percentage of workers within the total labor force who don't have a job, but who have looked for work in the past four weeks, and who are available to work. Those temporarily laid off from their jobs are also included as unemployed. Yet as critical as the figure is as a measure of how many people are out of work and therefore suffering financial hardship from a lack of a paycheck, one key item to note about the unemployment rate is that the number does not reflect workers who have stopped looking for work entirely. It's therefore important to look beyond the headline numbers to see whether the overall workforce is growing or shrinking.
The trade deficit measures the difference between the value of a nation's imported and exported goods. When exports exceed imports, a country runs a trade surplus. But in the U.S., imports have exceeded exports consistently for decades. The figure is important as a measure of U.S. competitiveness in the global market, as well as the nation's dependence on foreign countries.
Each month, the Bureau of Economic Analysis measures changes in the total amount of income that the U.S. population earns, as well as the total amount they spend on goods and services. But there's a reason we've combined them on one slide: In addition to being useful statistics separately for gauging Americans' earning power and spending activity, looking at those numbers in combination gives you a sense of how much people are saving for their future.
Consumers play a vital role in powering the overall economy, and so measures of how confident they are about the economy's prospects are important in predicting its future health. The Conference Board does a survey asking consumers to give their assessment of both current and future economic conditions, with questions about business and employment conditions as well as expected future family income.
The health of the housing market is closely tied to the overall direction of the broader economy. The S&P/Case-Shiller Home Price Index, named for economists Karl Case and Robert Shiller, provides a way to measure home prices, allowing comparisons not just across time but also among different markets in cities and regions of the nation. The number is important not just to home builders and home buyers, but to the millions of people with jobs related to housing and construction.
Most economic data provides a backward-looking view of what has already happened to the economy. But the Conference Board's Leading Economic Index attempts to gauge the future. To do so, the index looks at data on employment, manufacturing, home construction, consumer sentiment, and the stock and bond markets to put together a complete picture of expected economic conditions ahead.