US jobless rate drops unexpectedly
The number of Americans filing new applications for unemployment benefits unexpectedly fell last week, suggesting recent gains in employment are being sustained.
Initial claims for state unemployment benefits dropped 15,000 to 358,000, the US Labor Department said today.
A four-week average of new filings, which provides a better view of the trend, hit its lowest level since April 2008. The decline in claims, which defied economists' forecasts for a rise to 370,000, pointed to building strength in the labor market and raised the odds of another solid increase in employment this month.
"It not only validates the gains that we had last month ... but it shows that we are likely to add to those gains in a meaningful way in February," said Millan Mulraine, senior macro strategist at TD Securities in New York.
The economy added 243,000 jobs in January and the unemployment rate dropped to a three-year low of 8.3 per cent.
Last week's decline in new applications for jobless benefits brought them closer to the 350,000 mark that economists say would signal sustained labor market strength.
Initial claims spent a lot of time below that level from 2004-2008 before they shot sharply higher as the economy's troubles deepened.
US stocks opened higher on optimism spurred by the data and by news that Greek leaders had reached a deal on reforms needed for a new bailout, but by late morning stocks had given up their gains.
US treasury debt prices trended lower, while the dollar fell against a basket of currencies.