WASHINGTON – The number of new people signing up for jobless benefits last week fell sharply, a fresh sign that employers are feeling better about the business climate.
The Labor Department reported Thursday that new applications filed for unemployment insurance dropped by 10,000 to 303,000, the best showing since the beginning of April. The level of new jobless-benefit filings suggest that the labor market is maintaining decent momentum.
Last week's decline was steeper than analysts were expecting. Before the report was released, they were forecasting claims to fall to 308,000.
The more stable, four-week moving average of claims, which smooths out week-to-week fluctuations, fell by 2,250 last week to 305,250. That marked the lowest level since late February.
Thursday's report also said the number of people continuing to collect unemployment benefits increased by 18,000 to 2.439 million for the week ending April 8, the most recent period for which that information is available.
Even with the increase, this figure still showed an improvement from last year, when the number of people continuing to draw jobless benefits stood at 2.639 million.
Other reports suggest that the job market is improving.
In March, the nation's unemployment rate dipped to 4.7 percent, matching its lowest point in 4 1/2 years. Hiring gains were widespread.
With the economy growing solidly and the job market improving, the Federal Reserve will be keeping a close eye on wage growth and other inflation barometers.
To fend off inflation, many economists believe the Fed will bump up short-term interest rates again — to 5 percent — at its next meeting on May 10. That would mark the 16th quarter point move since the central bank began boosting rates in June 2004.
Although the Fed in the minutes of its March meeting released Tuesday said that its nearly two-year rate-raising campaign was probably coming to an end, it also made clear that interest rate decisions will rely more heavily on incoming data about inflation and economic activity.
The government reported Wednesday a sharp increase in consumer prices for March — led by surging energy prices. Oil prices are now even higher, closing at a record high of more than $72 a barrel on Wednesday.
Many economists predict the Fed will stop tightening credit this year — but they differ on the timing. Some think the last increase will come at the May meeting. Others believe the Fed will push up its key interest rate to 5.5 percent before stopping this summer.