The number of laid-off workers filing new claims for unemployment benefits fell for a third straight week, dropping to the lowest level in more than four years, the Labor Department reported Thursday.
A total of 302,000 Americans filed applications for jobless benefits last week, down by 2,000 from the previous week on a seasonally adjusted basis. The level was the lowest since Oct. 28, 2000, in the closing months of the country's record 10-year long economic expansion.
The decline in jobless claims caught analysts by surprise. They had been forecasting an increase of around 12,000, reflecting a predicted bounce up after the impressive declines of 9,000 and 12,000 in the previous two weeks.
Analysts said the decline in claims provided further evidence that the labor market is continuing to show improvements with fewer layoffs and more companies deciding to hire new workers.
The four-week moving average for unemployment claims, which smooths out week-to-week volatility, also fell last week, dropping to 311,750, the lowest level since Nov. 4, 2000.
In a second report, the Labor Department said that prices for imported goods rose by 0.9 percent in January as foreign petroleum prices jumped 4.6 percent and the price of non-petroleum imports edged up 0.2 percent. Import prices are expected to continue rising this year as the weaker dollar makes foreign products more expensive for American consumers.
The January increase in import prices was the biggest jump since a 1.6 percent rise in October. In November and December, import prices had fallen as petroleum prices declined from record highs set in October.
Federal Reserve Chairman Alan Greenspan, delivering the central bank's latest economic forecast to Congress, said on Wednesday that the economy was growing at a solid pace with inflation pressures remaining low.
Even though the last recession ended in November 2001, companies kept laying off employees until the summer of 2003 as they succeeded in getting more output from their existing work force. That effort gave the country strong gains in productivity but also contributed to a sustained jobless recovery.
However, in 2004, payroll jobs increased by 2.2 million, after three years of job losses, and last month's job gains allowed President Bush to escape the dubious distinction of being the first president since Herbert Hoover to experience a net job loss during his first term in office.