U S jobless claims plunged 26,000 last week

WASHINGTON, Jan 12 (Reuters) The number of Americans filing new claims for jobless benefits plunged a larger-than-expected 26,000 last week to its lowest level in more than five months, a government report showed.

Initial filings for state unemployment insurance aid fell to 299,000 in the week ended January 6 from a revised 325,000 for the previous week and to its lowest since a matching 299,000 in July 2006, the Labor Department said.

A department analyst said yesterday there were no special factors behind the sharp drop but noted seasonal adjustment of data is particularly hard through the holiday season.

Jobless claims are at a level economists see as consistent with the solid pace of employment growth. Last week, a Labor Department report showed job growth surprisingly strong in December with the economy generating 167,000 jobs.

Analysts on Wall Street had expected claims, which provide a rough guide to the pace of layoffs, to fall to 324,000 from the 329,000 initially reported for the December 30 week.

A four-week moving average of claims, which smooths weekly volatility to provide a better sense of underlying job-market trends, also fell, dropping to 314,750 from 316,500 in the prior week.

The total number of unemployed still on the benefit rolls after drawing an initial week of aid dropped for the second straight week.

So-called continued claims edged down 3,000 to 2.43 million in the week ended December 30, the latest period for which figures are available.

REUTERS