The number of Americans filing initial claims for unemployment benefits unexpectedly fell 20,000 last week, a government report showed Thursday, underscoring a vigorous job market.
First-time claims for state unemployment aid dropped to 278,000 in the week ended Feb. 18 from an upwardly revised 298,000 the prior week, the Labor Department said.
“Initial claims were significantly better than the expected 300,000, and they were well within the range we would expect in a solid job market,” said Patrick Fearon, senior economist for A.G. Edwards & Sons in St. Louis.
“It remains pretty clear that corporations are interested in holding on to their workers as the economy continues to expand,” Fearon said.
The number of new claims remained under 300,000 for the sixth straight week, the longest stretch in more than five years. Last week’s drop returned claims to near six-year lows.
The U.S. dollar initially pared a few losses against the euro and the yen after the claims report but there was little reaction in bond and stock markets.
Wall Street economists had forecast initial claims to rise to 300,000 from the 297,000 originally reported for the week ended Feb. 11.
The four-week moving average of initial claims, which smooths weekly volatility to provide a better sense of job market trends, fell to 281,750 from 283,250.
The department said the number of unemployed who remained on the benefit rolls after an initial week of aid rose 41,000 to 2.50 million in the week ended Feb. 11, the latest period for which figures are available.
Last week’s drop in jobless claims comes during the survey period for the Labor Department’s monthly employment report, heightening its importance. February’s jobs data is set for release on March 10.
While analysts said the sharp drop in claims last week boded well for job creation in February, a return to winter weather after an unusually warm January could tamp down opportunities for finding work.
“So despite the indicator today, the report for February might not be quite as strong as this is suggesting,” Fearon said.