Washington, Nov. 21 (Bloomberg) -- The number of U.S. workers filing new claims for state unemployment benefits fell last week to the lowest in four months, pointing to a gradual improvement in the labor market. Initial jobless claims dropped to 376,000 in the week that ended Saturday from 401,000 the prior week, the Labor Department said. The last time claims were this low was the week ended July 20, when they totaled 366,000. The four-week average of jobless claims, a less volatile measure than the weekly number, fell below 400,000 for the first time in 11 weeks. That suggests the pace of firings has slowed, economists said. ``The labor market is beginning to firm up a little bit,'' said Christopher Low, chief economist at FTN Financial in New York. ``We are moving in the right direction. We probably are going to move back to job gains. They won't be big, but at least we will have growth.''
Economists had expected claims to rise to 395,000 last week from the 388,000 originally reported for the prior week, based on the median of 33 forecasts in a Bloomberg News survey. The Treasury's benchmark 4 percent note that matures in November 2012 fell more than 3/8 point after the report, pushing the yield up 5 basis points to 4.11 percent at 8:45 a.m. New York time. Lower prices for Treasury notes reflect signs the recovery may be gaining momentum.
Four-Week Average
The four-week moving average of claims fell to 395,750 from 400,250. The last time the average was this low was the week ended Aug. 24, when it was 394,500. The report also showed that the number of people continuing to collect unemployment benefits decreased by 61,000 to 3.58 million. Last week's claims figures cover the week when the Labor Department conducted its survey for the November employment report, which will be issued Dec. 6. In October, the jobless rate rose to 5.7 percent from 5.6 percent in September and the economy lost 5,000 jobs. After the economy expanded at a 3.1 percent annual rate in the third quarter, economists say slower consumer spending may rein in growth this quarter, holding it to a 1.6 percent pace, according to the latest Blue Chip Economic Indicators survey. Federal Reserve officials predict their 12 interest rate reductions over the past 1 1/2 years will spur growth to a 3 to 4 percent annual pace next year.
Xerox Job Cuts
Some companies are still firing workers. Xerox Corp. this week was among several companies announcing job cuts that will affect thousands of workers. The world's largest copier maker said it will eliminate 2,400 more jobs after slicing employment by 1,600 last quarter. The company has about 69,900 workers, down by more than a quarter from 1999, when it employed 94,600. Claims have averaged 405,000 so far this year, compared with 406,000 last year. The insured unemployment rate, which tends to track the U.S. jobless rate, declined to 2.8 percent in the week that ended Nov. 9 from 2.9 percent the prior week. The Labor Department also said that 33 states and territories reported an increase in new claims during the week that ended Nov. 9, while 20 states and territories reported a decrease. //www.quote.bloomberg.com