New claims for US unemployment insurance benefits plunged to the lowest level in nearly 15 years last week, the Labor Department reported Thursday.
Initial jobless claims, a sign of the pace of layoffs, dropped to a seasonally adjusted 265,000 in the week ending January 24, a hefty decline of 43,000 from the prior week\’s slightly upwardly revised level of 308,000.
It was the lowest level for initial claims since mid-April 2000. The decline in claims was much steeper than expected, with analysts projecting a reading of 301,000.
The Labor Department said there was no particular factor influencing the week\’s claims data, which is often volatile.
The four-week moving average, which helps to smooth week-over-week volatility in the data, fell by 8,250 to 298,500 last week. A year ago the average was 335,250.
Analysts said faulty seasonal adjustments involving the year-end holidays were likely to blame for the sharp decline in a week that also included the Martin Luther King Jr holiday.
"The seasonal problems will fade over the next few weeks, allowing the underlying trend to re-emerge," said Ian Shepherdson of Pantheon Macroeconomics.
"We have no reason to think it has changed significantly since before the holidays, when claims were running at about 290,000."
That low trend would be consistent with payroll growth in excess of 250,000, "other things equal," he said.
The US unemployment rate fell to 5.6 percent in December, its lowest level since June 2008, as the economy wrapped up its best annual job growth in 15 years, adding nearly three million jobs.
The Labor Department is due to release its January jobs report on February 6.