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Jobless claims fell unexpectedly last week
By Nancy Waitz
Thu Feb 23, 11:57 AM ET


WASHINGTON (Reuters) - The number of Americans filing initial claims for unemployment benefits unexpectedly fell 20,000 last week to levels close to their lowest in six years, said a government report on Thursday that underscored a vigorous job market.

First-time claims for state unemployment aid dropped to 278,000 in the week ended February 18 from an upwardly revised 298,000 the prior week, the Labor Department said. The number remained under 300,000 for the sixth straight week, the longest stretch in more than five years.

"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.

U.S. Treasury debt prices fell after the claims report reinforced the view that the economy is growing strongly and that the Federal Reserve will continue to raise interest rates. The dollar recovered slightly after paring losses initially. The stock market was more focused on the latest surge of violence in Iraq, and share prices were lower.

Wall Street economists had forecast initial claims to rise to 300,000 from the 297,000 originally reported for the week ended February 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 February 11, the latest period for which figures are available.

In a separate report that gauges change in the supply of jobs, the Conference Board, a private business research group, said its help-wanted index slipped to 37 in January from 38 in December.

"Consumer sentiment about job prospects over the next six months dipped in January," said Conference Board economist Ken Goldstein. "Thus, not only are the indicators suggesting modest gains in hiring, but consumers also do not think more new jobs will start opening up this spring."

Last week's drop in jobless claims comes during the survey period for the Labor Department's monthly employment report, heightening the importance of the closely watched report. 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 more normal 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.

http://news.yahoo.com/s/nm/20060223/bs_nm/economy_dc_4