The number of Americans filing new claims for jobless benefits slid last week to the lowest level in more than four and a half years.
The Labor Department report yesterday was the latest data to suggest improvement in the jobs market. The surprisingly large 30,000 drop in new claims, however, may have reflected distortions due to seasonal adjustments likely to be smoothed out in coming weeks.
"The overall trend seems to be that the labor market is improving," said Brian Kim, a currency strategist at RBS Securities in Stamford, Conn.
A Labor Department analyst said seasonal factors predicted a big increase in claims last week that would be typical for the first week of the quarter.
Unadjusted claims did rise, but far less than expected, resulting in the sharp drop in the seasonally adjusted figure. The analyst noted that one state reported a decline in claims last week when a rise had been expected.
"We will likely see some payback in the claims data reported next week. But through this potential volatility, it does look like the trend in the claims is improving somewhat," said Daniel Silver, an economist at JPMorgan.
California, given its large population and past "massive swings" in its claims data, was probably the state that caused the sharp drop in the seasonally adjusted figure, Silver said.