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U.S. jobless claims drop to three-month low

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New U.S. claims for unemployment benefits fell last week to a three-month low, hinting at some improvement in the listless labour market.

 

Initial claims for state unemployment benefits dropped 21,000 to a seasonally adjusted 434,000, the lowest since the week ended July 10, the Labour Department said on Thursday. That was the second straight decline in claims.

 

Analysts polled by Reuters had forecast claims edging up to 453,000 from the previously reported 452,000. The government revised the prior week's figure up to 455,000.

 

"A couple of months ago we started seeing improvement in numerous gauges of employment, and we're slowly getting that confirmation from data that's been coming out," said Steve Goldman, a market strategist at Weeden & Co. in Greenwich, Connecticut.

 

A Labour Department official said there was nothing unusual in the state data. The economy's painfully slow recovery from the worst recession since the Great Depression has left the labour market subdued and the unemployment rate at 9.6 percent.

 

While the upbeat report does not change expectations in the financial markets the Federal Reserve will ease monetary policy further next week, it could have an impact on the size of the anticipated bond purchases by the U.S. central bank.

 

The Fed has singled out unemployment and low inflation as key areas of concern. Last week, the four-week average of new jobless claims, considered a better measure of underlying labour market trends, fell 5,500 to 453,250.

 

The number of people still receiving benefits after an initial week of aid dropped 122,000 to 4.36 million in the week ended Oct. 16. That was the lowest reading since the week ended Nov. 22, 2008. The prior week's number was revised up to 4.48 million.

 

Analysts polled by Reuters had forecast so-called continuing claims falling to 4.40 million from a previously reported 4.44 million. The continuing claims data covered the survey period for the household survey from which the unemployment rate is derived.

 

The number of people on emergency benefits declined 258,102 to 3.78 million in the week ended Oct. 9.

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