US jobless claims fall to a three-and-a-half-year low

THE NUMBER of Americans filing new claims for jobless benefits dropped to a three-and-a-half-year low last week and factory activity in New York state scaled a seven-month high in December, more evidence of a pick-up in economic activity in the States.

Initial claims for state unemployment benefits dropped 19,000 to a seasonally adjusted 366,000, the Labor Department said yesterday.

That was the lowest level since May 2008, and confounded economists’ expectations for a rise to 390,000.

In a separate report, the New York Federal Reserve said its “Empire State” general business conditions index rose to 9.53 – the highest since May – from 0.61 in December.

The index was boosted by a strong rebound in new orders and an improvement in hiring.

“It all speaks to further stabilisation and a very positive trend in the US economy. Stability in the US economy is going to be a vital part of stabilising global GDP. This comes in a very good time,” said Peter Kenny, managing director at Knight Capital in New Jersey.

The unexpected drop in claims last week pushed them closer to the 350,000 mark that analysts say signals labour market strength.