Jobless claims in U.S. plunge to 15-year low
Data on jobless claims confirmed what U.S. consumers have been saying for the past three months: a strengthening job market is making Americans more confident.
The number of applications for unemployment insurance benefits plunged by 43,000 to 265,000 in the week ended Jan. 24, the fewest since April 2000, according to the Labor Department. The Bloomberg index of consumer comfort climbed in the seven-day period ended Jan. 25 to the highest level since July 2007.
The slump in claims, while probably overstated by seasonal fluctuations, helps ease concern that firings were inching up as companies fretted over slowing global growth. The confidence figures are the latest to show American households could potentially help the U.S. power past events abroad as falling gasoline prices and the lowest unemployment rate since mid-2008 propel spending.
“The labor market’s in good shape going into 2015 and looks like it will be in good shape for the rest of the year,” said Guy Berger, an economist at RBS Securities Inc. in Stamford, Connecticut, who projected a drop to 280,000. “There’s nothing wrong and almost everything right with the economy right now.”
Stocks fluctuated between gains and losses as investors scrutinized earnings amid concern over how plunging oil and a stronger dollar will affect corporate profits. The Standard & Poor’s 500 Index fell 0.1 percent to 1,999.81 at 12:55 p.m. in New York.
Federal Reserve policy makers on Wednesday boosted their assessment of the economy as the job market improved and fuel costs dropped. The central bank’s policy making Federal Open Market Committee described the expansion as “solid,” an improvement over the “moderate” performance it saw in December. It also substituted “strong” for “solid” in its evaluation of job gains.
The one blemish Thursday was an unexpected drop in pending home sales. Contracts to purchase previously owned houses fell 3.7 percent in December, the most in a year, according to figures from the National Association of Realtors.
The median forecast of 42 economists surveyed by Bloomberg called a 0.5 percent increase.
“Total inventory fell in December for the first time in 16 months, resulting in fewer choices for buyers and a modest uptick in price growth,” Lawrence Yun, the NAR’s chief economist, said in a statement. “More jobs, increasing consumer confidence, less expensive mortgage insurance and new low down-payment programs coming into the marketplace will likely lead to more demand from first-time buyers.”
Figures on jobless claims often see-saw around this time of year as the holidays make it difficult to adjust the data for seasonal variations.
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