New claims for U.S. jobless benefits fell by a larger-than-expected 11,000 last week, a government report showed Thursday, suggesting a healthy labor market and more job growth in March.
The number of Americans filing initial claims for state unemployment aid fell to 302,000 in the week ended March 18, from an upwardly revised 313,000 in the prior week, the Labor Department said.
It was the first drop in claims after three straight weekly increases. Economists had expected jobless claims to dip to 305,000 from the 309,000 initially reported for the week ended March 11.
"This is just a little bit better than the 305,000 expected, and certainly this is low enough to suggest demand for labor remains pretty healthy," said Patrick Fearon, senior economist with A.G. Edwards & Sons in St. Louis.
He said the report, which measured claims in the period of March used by the Labor Department for its broader report on unemployment and payrolls, suggests job growth will be solid this month.
"The trend in general for the last several months has been in this ballpark, with initial claims being really pretty low compared with the size of the workforce and the size of the economy. So for some time, jobless claims have been and indicator that the labor market remains healthy and March payrolls probably will remain pretty healthy as well," Fearon said.
Michael Englund, chief economist at Action Economics in Boulder, Colorado, agreed.
"It is more good news for the economy. The number had been rising, but it's still oscillating at lean levels. The market should be bracing for another strong payroll report in March," Englund said, forecasting a 210,000 gain in jobs this month.
The four-week moving average of claims, which offers a better view of underlying trends because it smooths weekly volatility, rose by 6,000 to 303,500, the first time this measure has exceeded the 300,000 level since the first week of 2006.
Economists say an average pace of layoffs of about 300,000 a week is consistent with steady employment growth.
The number of unemployed workers still on the benefit rolls after receiving an initial week of aid rose by 38,000 to 2.47 million in the March 11 week, the latest for which figures are available. The level of these so-called continued claims was slightly lower than the 2.48 million forecast by economists.
At 10 a.m. EST (1500 GMT), the National Association of Realtors is due to report existing home sales for February. Economists polled by Reuters forecast the pace of resales will slow to a 6.50 million unit annual rate, compared to a reported 6.56 million pace in January.