U.S. Jobless Claims Drop More Than Expected To 216,000

Adding to the positive picture of the labor market painted by last week's monthly jobs report, the Labor Department released a report on Thursday showing a bigger than expected drop in first-time claims for U.S. unemployment benefits in the week ended January 5th.

The report said initial jobless claims fell to 216,000, a decrease of 17,000 from the previous week's revised level of 233,000.

Economists had expected jobless claims to dip to 225,000 from the 231.000 originally reported for the previous week.

Meanwhile, the Labor Department said the less volatile four-week moving average rose to 221,750, an increase of 2,500 from the previous week's revised average of 219,250.

The report also said continuing claims, a reading on the number of people receiving ongoing unemployment assistance, slid by 28,000 to 1.722 million in the week ended December 29th.

The four-week moving average of continuing claims still climbed to 1,721,250, an increase of 15,250 from the previous week's revised average of 1,706,000.

Last Friday, the Labor Department released a separate showing employment in the U.S. spiked by much more than anticipated in the month of December.

The Labor Department said non-farm payroll employment soared by 312,000 jobs in December after climbing by an upwardly revised 176,000 jobs in November.

Economists had expected employment to increase by about 177,000 jobs compared to the addition of 155,000 jobs originally reported for the previous month.

The report also said the unemployment rate rose to 3.9 percent in December from 3.7 percent in November, while economists had expected the unemployment rate to come in unchanged.

However, the unexpected uptick by the unemployment rate came as the labor force jumped by 419,000 people compared to a much more modest 142,000-person increase in the household survey measure of employment.

The Labor Department also said average hourly employee earnings climbed by 11 cents to $27.48 in December, reflecting a 3.2 percent increase compared to the same month a year ago.

The annual rate of growth in average hourly employee earnings in December accelerated from the 3.1 percent increase seen in November, reaching its highest level since April of 2009.