Jobless claims fall to two-month low last week

WASHINGTON Thu Sep 27, 2012 8:33am EDT

People wait in line to meet with job counselor during a job fair at Workforce1 in New York September 6, 2012. REUTERS/Brendan McDermid

People wait in line to meet with job counselor during a job fair at Workforce1 in New York September 6, 2012.

Credit: Reuters/Brendan McDermid

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WASHINGTON (Reuters) - The number of Americans filing new claims for jobless benefits fell last week to the lowest level in two months, a hopeful sign for a labor market that has struggled to gain traction in recent months.

Initial claims for state unemployment benefits dropped 26,000 to a seasonally adjusted 359,000, the lowest level since July, the Labor Department said on Thursday. The prior week's figure was revised up to show 3,000 more applications than previously reported.

Economists polled by Reuters had forecast claims falling to 378,000 last week. The four-week moving average for new claims, a better measure of labor market trends, fell 4,500 to 374,000, breaking five straight weeks of increases.

A Labor Department official said there were no special factors influencing the report and no states had been estimated.

The labor market has been mired in weakness as worries about higher taxes and deep government spending cuts in January, the ongoing debt problems in Europe and slowing global growth lead employers to be cautious about ramping up hiring.

Sluggish job gains and stubbornly high unemployment spurred the Federal Reserve this month into launching a third round of bond purchases to drive down already low interest rates.

The U.S. central bank vowed to buy $40 billion worth of mortgage-backed securities each month until it sees a sustained upturn in the labor market.

The unemployment rate has been stuck above 8 percent for more than three years, the first time this has happened since the Great Depression, a hurdle for President Barack Obama's quest for a second term in office.

The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid fell 4,000 to 3.27 million in the week ended September 15.

The so-called continuing data covered the week for the household survey from which the unemployment rate is derived.

(Reporting By Lucia Mutikani; Editing by Andrea Ricci)

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