A job seeker looks over paperwork before speaking to recruiters at a job… (Jin Lee/Bloomberg )
WASHINGTON -- First-time jobless claims dropped more than expected last week to 344,000 and the number of people collecting unemployment benefits fell to its lowest level since mid 2008, the Labor Department said Thursday.
Initial claims for unemployment insurance were down 22,000 for the week ending Saturday, compared to the previous week.
Analysts had expected claims to drop only slightly, to 360,000, last week. The less-volatile four-week average was 355,000, down 6,750 from the average as of the previous week.
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Last week marked just the fourth time since early 2008 that weekly claims fell below 350,000, the level that economists say is consistent with strong job growth. Three of those weeks have come this year.
"There have simply been too many weeks this year with unemployment claims below 350K to not think the labor market is improving," said Chris Rupkey, chief financial economist for the Bank of Tokyo-Mitsubishi in New York.
Another positive sign was a continued drop in the total number of people collecting unemployment benefits. The figure dropped 91,000 last week to a seasonally adjusted 3.074 million.
The last time the number was lower was in June 2008. The Great Recession caused it to peak at 6.6 million a year later before it started slowly falling.
But economists worry that the automatic federal budget cuts set to start on Friday could slow the recovery and damage job growth.
The Congressional Budget Office has estimated the $85 billion in cuts this year would reduce economic growth by 0.6 percentage points and cause the loss of about 750,000 jobs.
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