The number of Americans filing for unemployment benefits last week fell from a five-month high, suggesting sustained labor market healing that could lead to further Federal Reserve interest rate hikes next year.
Initial claims for state unemployment benefits dropped 11,000 to a seasonally adjusted 271,000 for the week ended Dec. 12, the Labor Department said on Thursday. The prior week's claims were unrevised.
It was the 41st straight week that claims remained below 300,000, a threshold associated with strong labor market conditions. That is the longest such run since the early 1970s.
The Fed on Wednesday raised its benchmark overnight interest rate by 25 basis points to between 0.25 percent and 0.50 percent, the first hike in nearly a decade. The U.S. central bank said there had been "further improvement" in the labor market and that "underutilization of labor resources" had diminished appreciably since the beginning of the year.
While claims tend to be volatile around the holiday session, the trend has continued to point to strengthening labor market conditions. The four-week moving average of claims, considered a better measure of labor market trends as it strips out week-to-week volatility, slipped 250 to 270,500 last week.
A Labor Department analyst said there were no special factors influencing the data and that only claims for Louisiana had been estimated as the state implements a new computer program.
The claims data covered the survey period for December nonfarm payrolls. The four-week average of claims dipped 500 between the November and December survey periods, suggesting another strong month of job gains. Payrolls increased by 211,000 in November.
As the labor market approaches full employment, claims probably have little room for further declines.
The claims report showed the number of people still receiving benefits after an initial week of aid fell 7,000 to 2.24 million in the week ended Dec. 5.
The four-week moving average of the so-called continuing claims increased 16,250 to 2.20 million.