First-time jobless applications hit five-year low

First-time applications for jobless benefits dropped to a five-year low last week, another sign that the labor market is healing. 

Those seeking weekly unemployment benefits fell by 5,000 to a seasonally adjusted 330,000, the best showing since January 2008, as employers slow the pace of layoffs and continue hiring, the Labor Department reported on Thursday. 

The four-week average, which better reflects the direction of the job market, dropped by 8,250 to 351,750, another five-year low for a job market that has been steadily hiring workers, though not yet at a pace to significantly lower the unemployment rate. 

Even through the fiscal-cliff debate, the rate of hiring remained steady, a surprise to some economists who expected that businesses would pull back on adding employees. 

But the economy and the job market still face several legislative headwinds — scheduled spending cuts and completion of a budget for the remainder of the 2013 fiscal year. 

Congress appears poised to shift the debt-limit debate over the raising of the nation's $16.4 trillion ceiling to this summer. The House passed a bill on Wednesday and the Senate is expected to take up the measure soon, possibly next week. 

The largest increases in initial claims for the week ending Jan. 12 were in Texas, where they were up by 12,786; California (+10,232); and Florida (+7,314).

The biggest improvements were seen in New York, which reported a drop of 27,487, while Georgia's claims fell by 7,520 and North Carolina's were down by 5,541.