Jobless claims tumble to five year low

There is a glimmer of hope for the sluggish labor market in the U.S.

A report released Thursday shows the number of Americans filing new claims for unemployment benefits dropped to a five-year low last week.

The Labor Department said initial claims for state unemployment benefits fell 37,000 to a seasonally adjusted 335,000, the lowest level since January 2008.  

The prior week's claims figure was revised to show 1,000 more applications than previously reported.

While last week's decline ended four straight weeks of increases, it is probably not the start of a new trend or a sign of a material shift in labor market conditions as claims tend to be very volatile around this time of the year.

This is because of large swings in the model used by the department to iron out seasonal fluctuations.

A Labor Department analyst said the model had expected a large increase in claims last week, but the actual number of filings only showed a modest increase, leading to a big decline in the seasonally adjusted figure.

The claims report also showed the number of people still receiving benefits under regular state programs after an initial week of aid increased 87,000 to 3.21 million in the week ended January 5.

Courtesy: MSNBC