Statistics show that Americans filing for unemployment benefits have dropped in numbers more than what was projected last week. This meant that the US labor market is now on solid footing even in the face of slow growth in the economy and the rout recently experienced by the stock market.
The numbers of application for unemployment benefits remained at levels that were characteristic of a moderately healthy labor market.
According to the Department of Labor, first time claimants of unemployment benefits have dropped 16,000 to an adjusted 269,000 for the week, ending the season on Feb. 6. Economists have originally projected last week that the number would be about 281,000.
The four-week general claims average which is regarded as a better indicator of labor market trends since it identifies week per week instability, dropped to 2,000 last week, its lowest level since December 1973. The unemployment benefits claims report covered the time in which the US government surveyed the payroll portion of the October unemployment report of employers.
The decrease forced down unemployment claims to almost the same numbers of their post-recession lows of about 256,000, indicating that there are very low layoffs even at a time when the economic outlook in the domestic market looks uncertain.
"The economy might be sailing into a storm, the financial markets say, but if so, the U.S. economy is in a very strong position to weather whatever comes, with the labor market the strongest in decades," Chris Rupkey said. He is the chief economist at MUFG Union Bank in New York.
However, this report was dwarfed by increasing fears of global growth, causing the yield on the benchmark 10-year U.S. Treasury note to fall to its three-year low. Additionally, the country's stock indices dropped over 1 percent. The dollar also fell to a 15-month low versus the yen amidst the gloomy outlook on global growth.
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