The number of jobless applications filed in the United States for claiming unemployment benefits dropped last week, while job cuts fell sharply in the month of December, indicating towards a tightening labor market.
The US Labor department report, released on Thursday, supported the notions of faster growth in 2015 due to positive consumer spending despite a faltering world economy.
Jim Baird, chief investment officer at Michigan’s Plante Moran Financial Advisors, said, “Labor market conditions continue to improve, providing support for consumers and contributing to a virtuous cycle for the economy.”
According to the Labor Department, the new applications for claiming state unemployment benefits declined by 4,000 to a seasonally adjusted 294,000 for the week that ended on January 3.
The figures fell short of the Wall Street’s expectations of a decline to 290,000. While that was a bit less than the expectations, the trend in jobless claims remained consistent, signaling a steadily tightening labor market of the country.
Anthony Karydakis, chief economic strategist at New York-based Millar Tabak, said, “Claims have never dropped below the 280,000-290,000 range in the last 20 years, reflecting the reality that a certain number of layoffs is a natural part of the growth/lifecycle of companies even in the best of times.”
The four-week moving average of unemployment claims held below the major 300,000 mark for the 17th consecutive week.
The jobless claims data helped the US stocks rally for a second consecutive day, while the US government debt prices dropped. On the other hand, the US dollar jumped to a nine-year high against the euro on the positive sentiments that the European Central Bank (ECB) could soon embark on a monetary stimulus program to ward off a prevailing recession in the euro zone.