US initial jobless claims drop in line with expectations

The number of workers filing first-time applications for unemployment benefits fell by 4,000 to 294,000 in the week ended 3 January, with analysts predicting continued labor market improvement through the year.

Consensus expectations had called for a 10,000 drop and the reported decline leaves the four-week moving average unchanged at 291,000.

A report released by the Labor Department on Thursday showed continuing claims for the week ended 27 December rose to 2.45m from a downward-revised 2.35m in the previous seven days, while the four-week trend fell to 2.39m.

“Claims data, particularly on the continuing claims side, continue to be volatile as seasonal factors work their way through the data,” Barclays analysts said in a note.

“The insured unemployment rate was unchanged at 1.8% in the latest reading and the Labor Department reported no special factors in this week’s report.

“On balance, separations at historically low levels reflect continued labor market improvement, which we expect will continue through the year.”

Labor Department figures out on Friday are expected to show payrolls climbed by 240,000 in December, which would set the gain in employment for all of 2014 at 2.89m, the most since 1999, according to analysts’ forecast.