Jobless claims drop to four-year low

The labor market continues to churn out positive numbers as first-time jobless claims sank to a nearly four-year low last week. 

Weekly applications for unemployment benefits fell by 13,000 to a seasonally adjusted 348,000, the lowest level since March 2008, and the fourth decrease in five weeks, the Labor Department said Thursday.  

The four-week average, which is less volatile than the weekly numbers, continued on its five-week decline to 365,250, a drop of 1,750 from last week's revised figure of 367,000, a nearly 13 percent improvement in the past year. 

First-time claims have dropped more than 20 percent from a year ago, down 72,000 from 420,000. 

The economy has been steadily adding jobs since August as layoffs have declined and companies have picked up their pace of hiring. 

Economists say when applications fall consistently below 375,000 it represents a healthy market and that hiring will lower the unemployment rate. 

The economy added a net 243,000 jobs in January, the most in nine months as the unemployment rate fell to 8.3 percent, the fifth straight month of drops. 

Economists have argued that the economy will need to continue adding jobs at a good clip to boost spending, a key driver of economic growth. 

The drop in the jobless rate has been helped by a drop in workers on the labor force, the Federal Reserve and some economists have estimated. Still, nearly 13 million people remain unemployed as policymakers wrestle over legislation to boost the job market. 

Retail sales, factory output and new residential construction have all shown positive signs of improvement as the economy continues to recover.

The number of people continuing to collect jobless benefits dropped by 100,000 to 3.43 million for the week ended Feb. 4, the lowest level since August 2008. 

Workers who have used up their 26 weeks of state benefits and are collecting federal benefits dropped by about 22,800 to 3.48 million in the week ended Jan. 28.

Mark Zandi, chief economist at Moody's Analytics, said recently that he expects the next round of yearly forecasts to show improvement after earlier dismal expectations for the labor market were released. 

Zandi said improvement is being seen across the labor market, with sectors like manufacturing, which expanded at the fastest pace in seven months in January, and the service sector to continue boosting the job market.