US jobless claims fall 27,000, but still elevated

Washington, Feb 23: The number of U S workers filing for first-time jobless benefits fell sharply last week, but the decline was smaller than expected, and economists say layoffs remained elevated because of winter storms.

The Labor Department said initial jobless claims dropped 27,000 to 332,000 for the week ended February 17, partially reversing a 46,000 jump in the prior week the department had said was partly storm-induced.

Financial markets largely ignored that data, which did not change expectations that the U.S. central bank would keep key interest rates steady well into the year.

''The labor market is still healthy and it is consistent with the view of the Federal Reserve being on hold,'' said Michelle Meyer, an economist for Lehman Brothers in New York.

Economists nevertheless said the claims data was worth watching to see if the relatively high number of filings reflected a weakening labor market, and not just the effect of the winter storms.

''It is still too soon to argue that claims are now trending higher -- data for just a two-week period, part of which was affected by severe weather, does not prove anything,'' Ian Shepherdson, chief U.S. economist at High Frequency Economics in Valhalla, New York, said in a research note.

Still, he said: ''Watch these data!'' The claims figures for the week ended February 10, upwardly revised to 359,000, had been affected by winter storms that shut down areas of the Midwest and Northeast, and economists polled ahead of the report were expecting claims to fall to 325,000 in the latest week.

The four-week moving average of new claims, a more reliable measure of employment conditions because it irons out weekly volatility, rose to 328,000 from 326,750 in the previous week.

It was the third straight weekly increase and took the average to its highest level in more than two months.

The number of workers continuing on unemployment benefits after drawing an initial week of aid fell 45,000 to a seasonally adjusted 2.51 million in the week ended February 10, the most recent week these figures were available.

In a separate report that gauges changes in the supply of jobs, the Conference Board, a private business research group, said its help-wanted index fell to 32 in January from an upwardly revised 34 in December.

''The forward indicators of labor market activity suggest moderate economic growth will continue to deliver new jobs into the late winter and early spring months,'' Ken Goldstein, labor economist at the Conference Board, said in a statement.

Reuters