US Jobless claims fall to lowest level in nearly 6 months

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Jobless claims fall to lowest level in nearly 6 months

01/12/2007 -

By Martin Crutsinger
The Associated Press

WASHINGTON - The number of newly laid off workers filing claims for unemployment benefits fell sharply last week to the lowest level in nearly six months.
The Labor Department reported Thursday that applications for jobless claims dropped by 26,000 to 299,000 last week on a seasonally adjusted basis. It marked the first time jobless claims have fallen below 300,000 since the week of July 22.
The improvement was much better than the decline of 9,000 that analysts had been expecting and provided further evidence that the slowing U.S. economy has not begun to seriously affect the labor market outside of specific industries such as housing and auto manufacturing.
But analysts cautioned against reading too much in the latest decline, saying that jobless claims are notoriously difficult to read during holiday periods.
Ian Shepherdson, chief U.S. economist at High Frequency Economics, in Valhalla, N.Y., predicted a big increase in claims in coming weeks as retail stores lay off temporary workers hired for the holiday shopping season.
On Wall Street, investors took encouragement from the dip in jobless claims, believing it showed that the economy is not slowing too quickly. The Dow Jones industrial average jumped 72.82 points to finish the day with another record close at 12,514.98.