Drop in US jobless claims reflect strength in labor market

The number of people applying for unemployment benefits in the US dropped close to the lowest level in around 50 years. The Labor Department said on Thursday that initial jobless claims decreased by 1,000 to 216,000 for the week ended December 22.

This signals strength in the labor market and fewer number of layoffs during the holiday period. The number of claims were high during the period from mid-September to mid-December but came down in three of the last four weeks. Initial claims dropped to 202,000 in the week ended September 15, which is the lowest level in 49 years.

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The four-week moving average of initial claims dropped by 4,750 to 218,000 last week. Continuing claims, which is the number of people already receiving jobless benefits, were down by 4,000 to 1.7 million.

Despite worries of a slowdown in the economy and the stock market volatility, the labor market has remained fairly strong. The Federal Reserve announced its fourth interest rate hike for the year last week but has indicated that next year there will be fewer rate hikes. US stock indices were down in early trade on Thursday.

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