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Jobless Claims Hit Lowest Level In 2.5 Years


First Posted: 03/03/11 10:21 AM ET Updated: 05/25/11 07:35 PM ET

WASHINGTON (Reuters) - New claims for unemployment benefits unexpectedly fell last week to touch their lowest level in more than 2-1/2 years, a government report showed on Thursday, slipping further below a key level associated with an acceleration in job creation.

Initial claims for state unemployment benefits dropped 20,000 to a seasonally adjusted 368,000, the lowest since May 2008, the Labor Department said.

Economists polled by Reuters had forecast claims rising to 398,000. The prior week's figure was revised down to 388,000 from the previously reported 391,000.

The claims data falls outside the survey period for the government's closely watched employment report for February due for release on Friday. Nonfarm payrolls probably increased 185,000 after snowstorms depressed growth to a paltry 36,000 jobs in January, according to a Reuters survey.

Claims have now held below the 400,000 threshold for a second straight week. Claims below that level are widely viewed as signaling strong jobs growth and economists believe it is only a matter of time before this is reflected in the payrolls numbers.

A Labor Department official said there was nothing unusual in the state level data, adding that no states were estimated.

The four-week moving average of unemployment claims -- a better measure of underlying trends - dropped 12,750 to 388,500 last week, the lowest since July 2008.

The number of people still receiving benefits under regular state programs after an initial week of aid fell 59,000 to 3.77 million in the week ended February 19.

Economists had expected so-called continuing claims to edge up to 3.80 million from a previously reported 3.79 million.

The number of people on emergency unemployment benefits dropped 32,094 to 3.65 million in the week ended February 12, the latest week for which data is available. A total of 9.24 million people were claiming unemployment benefits during that period under all programs.

Copyright 2010 Thomson Reuters. Click for Restrictions.

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Filed by Nicole Hardesty  |  Report Corrections