According to government data released on Thursday, initial jobless claims declined to 265,000 in the seven days ended Jan. 24 from a revised 308,000.
The number of people who sought new U.S. unemployment benefits in
late January fell to its lowest level in 14 years.
The drop, the largest since November 2012, was much larger than expected.
Polls conducted by MarketWatch signaled that analysts had expected claims for regular state unemployment-insurance benefits to tick down to 296,000 in the most recent weekly data from an initially reported 307,000 in the prior week.
The Labor Department said there were no special factors in the report, but ahead of time, economists said that any surprise should be tempered because the reporting week was shortened due to the federal Martin Luther King holiday.
After the jobless claims data were released, stock futures DJH5 moved higher.
Claims had been trending hire over the holidays and so the decline “is a relief,” said Jim O’Sullivan, chief U.S. economist at High Frequency Economics.
The Federal Reserve’s description of a “strong” labor market in their latest policy statement released on Wednesday is thus proved by the claims number. The Fed had a positive outlook, and economists said this was a signal the central bank was on track to hike short-term interest rates later this year.
Longer-run trends also showed improvement, with the four-week average of new claims falling 8,250 to 298,500. This is still above the levels seen in October.
On Thursday the government also said continuing claims fell by 71,000 to 2.39 million in the week that ended Jan. 17.
The four-week average of continuing claims, which reflect the number of people already receiving benefits, rose 8,250 to 2.44 million.
