The fewest Americans in almost 15 years filed applications for unemployment benefits during a holiday- shortened week that typically makes the data more volatile.
Jobless claims plunged by 43,000 to 265,000 in the week ended Jan. 24, the lowest since April 2000, a Labor Department report showed Thursday in Washington.
The median forecast of 51 economists surveyed by Bloomberg called for 300,000. The week included the Martin Luther King Jr. holiday, which makes the data more difficult to calculate, a government spokesman said as the report was released.
Firings probably will remain muted and companies will keep adding to payrolls as rising consumer confidence and spending help the U.S. economy withstand waning overseas demand. Federal Reserve policy makers yesterday boosted their assessment of the economy as the job market improved and fuel costs dropped.
“The labor market’s in good shape going into 2015 and looks like it will be in good shape for the rest of the year,” said Guy Berger, an economist at RBS Securities Inc. in Stamford, Connecticut, who projected a drop to 280,000. “There’s nothing wrong and almost everything right with the economy right now.”
Americans’ confidence increased last week to the highest level since July 2007 as job gains and falling prices at the gasoline pump boosted attitudes about the economy and personal finances, another report showed Thursday.
The Bloomberg weekly index of consumer comfort climbed to 47.3 in the period ended Jan. 25 from 44.7, the biggest weekly advance since March 2010. A gauge of optimism about the economy has almost doubled since the end of September, while a measure of personal finances was the strongest since October 2007.