US jobless claims hold steady

The US labour market held steady as first-time claims for jobless benefits remained unchanged from the previous week’s level, the lowest since the early days of the financial crisis.

The number of individuals who filed for unemployment insurance for the first time remained at 351,000 in the week ending February 18, unchanged week on week, new Labor Department data showed. The prior week’s figure was revised up to 351,000 from the previously reported 348,000.

The past two weekly readings have been the lowest since March 2008.

Analysts speculated that with weekly claims approaching levels last seen before the recession, employers might be close to ending a long cycle of job losses, giving fresh hope that the labour market is slowly repairing.

The four-week moving average of new claims, which smooths out weekly volatility and is seen as a better measure of labour market trends, fell 7,000 to 359,000, from the previous week’s revised average of 366,000.

The number, which is also the lowest since March 2008, is down nearly 20,000 compared with the same time last month, indicating further signs of improvement in the labour market.

Continuing claims for benefits for the week ending February 11 stood at 3.39m, or a decrease of 52,000 from the preceding week’s revised level of 3.44m. The drop left continuing claims at their lowest level since August 2008.

The unemployment rate for insured workers is unchanged at 2.7 per cent.

“The labour market recovery is now fully under way, with claims dropping sharply, payroll employment up by more than 200,000 per month in recent months, and the unemployment rate falling from 9.1 per cent in August 2011 to 8.3 per cent in January 2012,” said Gus Faucher, senior economist at PNC Financial Services Group.

“The improved jobs market is driving income gains and higher consumer confidence, which in turn is driving further gains in consumer spending. The economy is close to a self-sustaining expansion,“ he added.

In spite of the continued positive sentiment surrounding the jobs market, 23.8m Americans are still either out of work or underemployed.

Although weekly jobless claims have become important for investors who are looking for signs of an improving US economy, there was little market reaction to the latest report.

The data follows positive housing figures released on Wednesday. Sales of previously occupied homes in the US rose 4.3 per cent in January to a seasonally adjusted yearly rate of 4.57m as sellers reduced asking prices.

The Federal Housing Finance Agency’s house price index on Thursday showed that prices were down 0.8 per cent year on year for the month of December, compared with a 2.3 per cent year-on-year fall in November. However, the data, which are provided by Fannie Mae and Freddie Mac, showed that for the month of December alone prices improved a modest 0.7 per cent from the month before, continuing November’s 0.7 per cent increase.