Initial Claims Continue to Move In the Right Direction

From Bloomberg:

Fewer workers than forecast filed claims for unemployment benefits last week, pointing to a drop in firings that signals the U.S. job market is improving.

Applications for jobless insurance payments fell by 3,000 to 420,000, sending the average over the past four weeks to the lowest level since August 2008, according to data from the Labor Department issued today in Washington. Other reports showed work began on more houses last month and manufacturing picked up in the Federal Reserve Bank of Philadelphia region in December.

A decrease in firings would be a harbinger of bigger gains in payrolls that will help bring down the jobless rate, which has been at 9.5 percent or higher for 16 consecutive months, the longest stretch since monthly records began in 1948. Fed policy makers this week said they will continue to buy Treasury securities in a bid to reduce unemployment.

“Hiring is picking up, but there’s still a lot of work to be done,” said Aaron Smith, a senior economist at Moody’s Analytics Inc. in West Chester, Pennsylvania. “The labor market is gaining traction, which should be a positive for housing.”