Jobless claims near three-month low
(Reuters) - New claims for unemployment benefits fell to a near three-month low last week, pointing to some improvement in the troubled labor market.
Thursday's relatively upbeat report did not change perceptions the Federal Reserve will roll out a new asset purchasing program as early next month to keep interest rates low and support the economic recovery.
Initial claims for state unemployment benefits dropped 11,000 to a seasonally adjusted 445,000, the lowest since the July 10 week, the Labor Department said.
Analysts polled by Reuters had forecast claims edging up to 455,000 from the previously reported 453,000. The government revised the prior week's figure up to 456,000.
"It does show that the summer rise in jobless claims has been corrected. We are getting a lot of mixed signals in the labor market. There is a good deal of uncertainty with tomorrow's payroll number," said Robert Dye, senior economist at PNC Financial Services in Pittsburgh.
U.S. stock index futures rose after the report, while Treasury debt prices were mixed. The U.S. dollar pared losses against the euro.
The data has little bearing on September's employment report due on Friday as it falls outside the survey period.
Non-farm payrolls were likely unchanged last month as more temporary census jobs ended and cash-strapped state and local governments laid off workers, even as private hiring picked up, according to a Reuters survey.
The Fed, which cut overnight interest rates to near zero in December 2008, has already injected $1.7 trillion into the economy by purchasing mortgage-related and government bonds.
Fed Chairman Ben Bernanke said on Monday that program had helped to support the economy and he believed additional purchases "have the ability to ease financial conditions."
Although the longest and deepest recession since the 1930s ended in June 2009, the economy is experiencing its weakest recovery by historical norms.
The sickly economy, characterized by a near 10 percent unemployment rate, is making Americans increasingly despondent about their future, a factor that could determine the outcome of next month's midterm elections.
Opinion polls suggest the Democratic Party might lose control of Congress, with Republicans expected to take over the
U.S. House of Representatives.
The four-week average of new jobless claims, considered a better measure of underlying labor market trends, fell 3,000 to 455,750, the lowest level since the July 24 week.
The second straight week of declines in new applications for unemployment benefits pushed them further away from a nine-month high of 504,000 touched in mid-August. Claims are now in the upper end of the 400,000-450,000 range that analysts say is normally associated with labor market stability.