Last week fewer Americans than predicted filed claims for unemployment benefits. Job losses slow down as the economy starts to recover.
Initial jobless claims dropped by 20,000 to 512,000 in the week ended Oct. 31, the fewest since January, from 532,000 the prior week. The number of people receiving jobless benefits fell to the lowest level since March, while those who had exhausted their allotment and were receiving extended payments climbed, Labor Department figures showed today in Washington.
Government stimulus measures such as the homebuyer tax credit are boosting consumer demand, helping to pull the economy out of its worst recession in seven decades. The government may report tomorrow that employers last month cut the fewest jobs in more than a year, Bloomberg reports.
It was also reported, a consensus estimate of economists surveyed by Briefing.com expected 522,000 new claims.
The 4-week moving average of initial claims was 523,750, down 3,000 from the previous week's revised average of 526,750.
"This report suggests that the peak for the unemployment rate may be closer than commonly thought," said John Lonski, a chief economist at Moody's Economy.com. "Jobs are still disappearing, but the contraction of payrolls continues to narrow," CNNMoney.com reports.
Meanwhile, stocks continued to trade higher Thursday on a decline in filings for jobless benefits last week and a Cisco-led gain for technology.
Recently, the Dow Jones Industrial Average gained 178 points, or 1.8%, to 9981. In a broad move, all 30 of the Dow's components traded in the green. Gains were lead by Cisco Systems, which rose 2.8% after the networking gear maker's better-than-expected first-quarter report.
"We had quite a positive bent coming into the open on those jobless claims and then the Hyatt Hotels IPO gave us a lift," said Anthony Conroy, head trader for equities at BNY ConvergEx. "People are taking that as a positive clue. We're going to have these three and five percent swings, but the bias is still positive," The Wall Street Journal reports.
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