New jobless claims sank to a six-year low last week, according to the Department of Labor. The number of U.S. workers filing for first-time unemployment benefits fell to 271,000 from a revised 307,000 the prior week.
This was the largest one-week drop since late September, according to Reuters. As a result, initial jobless claims dropped to their lowest level since April 2000, when they were 257,000, the wire service noted. The four-week moving average also fell 12,000, to 299,000, the lowest level since October 2000.
Pierre Ellis, senior economist at Decision Economics in New York, told Reuters: “There was a big decline in new claims and a very large drop in the number of continuing claims….This is a volatile series, so there is the potential that claims could rise next week. But the bottom line is the labor market is not weakening and is probably strengthening.”
Also encouraging: The number of people still on the jobless rolls after their first week of receiving aid dropped by 158,000, to 2.53 million, in the seven days ended January 7, the latest week for which this data is available.
Housing starts, on the other hand, fell 8.9 percent in December, to an annual rate of 1.933 million units, which was below Wall Street estimates. This could suggest a slowdown in the overall market.
“As long as mortgage rates don’t spike, we might expect a slow moderation in the market,” Joel Naroff, chief economist at Naroff Economic Advisors, told Reuters. “But if rates do pop, watch out.”