WASHINGTON (Reuters) - The number of Americans lining up for new jobless benefits dropped to the lowest level in nearly four years last week, according to a government report that showed ongoing healing in the labor market.
Initial claims for state unemployment benefits fell 6,000 to a seasonally adjusted 357,000, the lowest level since April 2008, the Labor Department said on Thursday.
But the claims data could bolster the case that the healing labor market is lowering the need for the Federal Reserve to do more to boost growth.
New claims have fallen sharply in recent months, boosting expectations the end of a long cycle of heavy layoffs will lead to more hiring.
“You put this number with the other job numbers we have seen and they show the labor market continues to grow,” said Stan Shipley, an economist at ISI International Strategy and Investment in New York.
U.S. stocks were mixed, focusing instead on a rise in Spanish bond yields that renewed concerns about the euro zone’s financial health. Prices for U.S. government debt rose while euro weakened against the dollar.
The weekly jobless report, which showed new claims were just above analysts’ forecasts, has no direct relationship to the March employment report due on Friday.
St. Louis Federal Reserve Bank President James Bullard, while not a voting member of the Fed’s policy setting committee this year, said on Thursday the central bank should now pause and assess developments in the economy.
Graphic - jobless claims: link.reuters.com/wyf57s
Graphic on planned U.S. layoffs: link.reuters.com/jyf57s
Graphic on US same-store sales: link.reuters.com/jeg57s
The four-week moving average for new claims, a more reliable measure of labor market trends, declined 4,250 to 361,750.
“The claims data are consistent with modest job growth in March,” said Yelena Shulyatyeva, an economist at BNP Paribas in New York.
Economists polled by Reuters expect the employment report will show the U.S. economy added 203,000 jobs last month, notching up a fourth straight month of solid job gains.
That would mark the longest stretch of monthly employment gains topping 200,000 since 1999.
Some economists think an unseasonably warm winter helped boost hiring in recent months.
Reports from U.S. retailers suggested good weather continued to help sales in March, prompting some retailers to raise their profit expectations for the quarter.
Employers also appear optimistic enough to hold onto staff. The number of planned layoffs at U.S. firms fell in March to the lowest level in 10 months, according to the report from consultants Challenger, Gray & Christmas, Inc.
The Labor Department report showed continued claims, which measures the number of people still receiving benefits under state programs after an initial week of aid, fell to its lowest since August 2008.
“(That is a sign) that not only layoffs have fallen, but those that have lost jobs are finding employment more quickly,” Nomura economist Ellen Zentner said.
Still, it remains clear the recovery in the labor market has a long way to go. The unemployment rate is expected to hold at a 8.3 percent in March.
Thursday’s claims data showed 7.05 million people were claiming unemployment benefits during the week ended March 17 under all programs. That was 107,760 lower than during the prior week.
Additional reporting by Richard Leong and Leah Schnurr in New York; Editing by Neil Stempleman