WASHINGTON - The number of people applying for U.S. unemployment benefits dropped by 42,000 last week to a seasonally adjusted 338,000, the biggest drop since November 2012. But economists say the figures from late November and December are warped by seasonal volatility around the Thanksgiving, Christmas and New Year's holidays.
The Labor Department reported Thursday
that the less-volatile four-week average rose 4,250 to 348,000.
Claims had jumped 75,000 over the two
weeks that ended Dec. 14 before plunging last week. The Labor Department
struggles to account for seasonal hiring by retailers and other businesses and
for temporary layoffs of cafeteria workers and other employees at schools that
close for the holidays.
Unemployment claims are a proxy for
layoffs, and the recent declines are consistent with a solid job market.
Hiring has been healthy the past four
months. The economy added an average of 204,000 jobs every month from August
through November, an improvement from earlier this year.
The unemployment rate fell in November to a five-year low of 7 percent. Still, that remains above the 5 percent to 6 percent rate that would signal a normal job market. And long-term unemployment remains a big blot on the economy's performance: Nearly 4.1 million Americans have been unemployed for six months or more.