US weekly jobless claims post largest drop in almost 2 years

Poll had forecast first-time applications for jobless benefits falling to 250,000 last week

New applications for US unemployment benefits recorded their biggest drop in nearly two years last week, pointing to a further tightening in the labor market.

Initial claims for state unemployment benefits declined 25,000 to a seasonally adjusted 234,000 for the week ended April 1, the Labor Department said on Thursday. The drop was the largest since the week ending April 25, 2015.

The prior week's data was revised to show 1,000 more applications received than previously reported.

Claims have now been below 300,000, a threshold associated with a healthy labor market for 109 straight weeks. That is the longest stretch since 1970 when the labor market was smaller. The labor market is currently near full employment.

Economists polled by Reuters had forecast first-time applications for jobless benefits falling to 250,000 last week.

A Labor Department analyst said there were no special factors influencing last week's claims data. Claims for Louisiana were estimated.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 4,500 to 250,000 last week.

The dollar extended gains versus the euro and the yen on the data. US government bond yields rose.

Last week's claims data has no bearing on March's employment report, which is scheduled for release on Friday. Claims rose during the survey week for March's nonfarm payrolls, suggesting some moderation in the pace of job growth after two straight months of employment gain in excess of 230,000.

Also pointing to some pullback in job gains, global outplacement consultancy Challenger, Gray & Christmas, reported on Thursday that US-based employers announced 43,310 job cuts in March, up 17 per cent from February. Most of the layoffs were in retail, telecommunications and education sectors.

A survey on Wednesday showed a measure of services sector employment slipping in March, but remaining at a level consistent with growing payrolls. Another report, however, showed private payrolls surged by 263,000 jobs in March.

According to a Reuters survey of economists, nonfarm payrolls likely increased by 180,000 jobs last month after rising 235,000 in February. The unemployment rate is seen steady at 4.7 per cent.

Thursday's claims report also showed the number of people still receiving benefits after an initial week of aid decreased 24,000 to 2.03 million in the week ended March 25. The four-week moving average of the so-called continuing claims fell 7,750 to 2.02 million, the lowest level since 2000.