Jobless claims hit 5-year low

The average number of first-time jobless claims fell to their lowest level in five years last week, another sign of the labor market's slow but steady improvement. 

Those seeking unemployment benefits dropped by 10,000 to a seasonally adjusted 332,000 in the week that ended March 9, a reflection that businesses are laying off fewer workers even amid uncertain economic conditions, the Labor Department said Thursday.

The four-week moving average of claims, which provides a better trajectory of the direction of the job market, dropped by 2,750 to 346,750, the lowest level since March 2008.

Economists argue that the labor market is healthier when applications fall below 375,000.

Nearly a week ago, the Labor Department said that employers added 236,000 jobs and that the unemployment rate hit a four-year low of 7.7 percent, from 7.9 in January. 

Employers have added an average of 200,000 jobs per month from November through February, which is a faster pace than through the final half of last year.

Economists argue that if job creation can maintain that pace, the unemployment rate will continue to drop this year and, eventually, fall below 7 percent in early 2014. 

Concerns abound, though, about the possible negative economic effects of the $85 billion in automatic spending cuts, which went into effect on March 1. 

A slowdown in jobs growth is expected, but economists such as Mark Zandi, chief economist for Moody's Analytics, say "the most likely outlook is that after a mid-year lull due to the fiscal headwinds, the economy will swing into higher gear by this time next year."

"The private economy is steadily improving, and that will shine through once the fiscal winds blow less hard."

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