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US jobless claims hit new lows

business Updated: Dec 16, 2011 21:52 IST
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The number of Americans filing new claims for jobless benefits dropped to a 3-1/2 year low last week and factory activity in New York scaled a seven-month high in December, more evidence of a pick-up in economic activity.

Initial claims for state unemployment benefits dropped 19,000 to 366,000, the Labor Department said late on Thursday. That was the lowest level since May 2008, and confounded economist’ expectations for a rise to 390,000.

In a separate report, the New York Federal Reserve said its “Empire State” general business conditions index rose to 9.5 — the highest since May — from 0.6 in December.

The index was boosted by a strong rebound in new orders and an improvement in hiring.

“It all speaks to further stabilisation and a very positive trend in the US economy,” said Peter Kenny, managing director at Knight Capital in New Jersey. “Stability in the US economy is going to be a vital part of stabilising global GDP (Gross Domestic Product). This comes in a very good time.”

The unexpected drop in claims last week pushed them closer to the 350,000 mark that analysts say signals labour market strength.

It offered further proof of increased momentum in the pace of economic activity, even though retail sales rose modestly in November. This is in contrast to Europe, where the debt crisis has already pushed some economies into recession.