Fewer Americans seeking unemployment benefits as applications drop 5000 last

Filings for unemployment benefits in the US decreased to a four-week low, indicating a still-solid labor market approaching the new year. Economists polled by Reuters had forecast claims dipping to 270,000 in the latest week. Applications are hovering close to the 255,000 level reached in July, the lowest since the 1970s. The data are an indicator for the pace of layoffs. Versus the November survey week, initial jobless claims were flat in December and continuing claims were up 40k.

Last week’s preliminary report was revised to 272,000 from 271,000. The Labor Department said there were no special factors behind the results. The four-week moving average of the so-called continuing claims rose 10,000 to 2.21 million. The unemployment rate among people eligible for benefits dropped to 1.6 percent from 1.7 percent. This is reported with a one-week delay (for the week ending December 12) and is what we refer to as the army of the unemployed.

The claims have been below the level of 300,000 since March this year, and economists say it is consistent with strength in the labor market.

The Labor Department further adds the total claims this year has been half as many claims as were made in the year 2009.

Last week, the Federal Reserve raised interest rates for the first time in almost a decade, citing an improving jobs market. It has dropped seven-tenths of a percentage point this year.