New claims for US jobless benefits hit a three-month low as economy picks up

City A.M. Reporter
New US claims for jobless benefits hit a near three-month low last week, suggesting some let up in the labour market’s distress but likely not enough to keep the Federal Reserve from easing monetary policy further.

Initial claims for state unemployment benefits dropped 11,000 to 445,000, the lowest since 10 July, the Labour Department said yesterday. Financial markets had expected claims to edge up to 455,000.

Sales at US retail chains last month also showed unexpected strength. US same-store sales rose 2.8 per cent, according to Thomson Reuters data which tracks 28 top chains, beating analysts’ estimates for a 2.1 per cent increase.

Sales, which rose for the 13th straight month, were boosted by back-to-school buying.

The US central bank’s policy-setting committee meets on 2-3 November. The Fed, which cut overnight interest rates to near zero in December 2008, has already pumped $1.7 trillion (£1.1 trillion) into the economy by buying mortgage-related and government bonds.

The prospect of further bond purchases pushed the dollar down to a 15-year low against the Japanese yen and an all-time low against the Swiss franc yesterday.

Financial markets will likely take a further cue from a government report on September employment later today.