Unemployment benefit claims dropped 17,000 to 297,000

Claims for unemployment benefits in the US last week was 297,000, a 17,000 drop, according to the Labor Department.

Most economists predicted a figure of around 298,000.

The four-week rolling average, a less volatile measure which is thought to be a more reliable indicator of the underlying trend, rose by 4,750 to 299,000.

For 11 of the past 12 weeks claims for unemployment benefits has been lower than 300,000. The only time the figure spiked above that level in three months.

This is a signal that the American labor market is recovering at a healthy pace with employers to adding workers and anticipating stronger economic growth.

The number of Americans receiving unemployment checks rose by 39,000 last week to 2.36 million.

In a Bloomberg report, Gregory Daco, lead U.S. economist at Oxford Economics USA Inc. in New York, who predicted initial claims would drop to 296,000, said:

“Overall the picture of labor is one of ongoing payroll gains and gradually firming wage growth. If jobless claims are below that 300,000 threshold, that’s typically in line with strong payroll gains.”

The unemployment rate dropped from 7.2 percent in October last year to 5.8 percent in October this year. The jobless rate hasn’t been this low since July 2008, just before the global financial crisis.

According to the data firm FactSet, the November unemployment report, due to be released on Friday, is expected to show job gains of 225,000 last month.