Jobless claims data show US labour market healing

NEW claims for US unemployment benefits rose for the first time in four
weeks, but the trend still pointed to a steady decline in job layoffs
across the country, the Labour Department said yesterday.


Initial jobless claims climbed to 381,000 in the week ending December
24, an increase of 15,000 from the prior week's upwardly revised
366,000 claims.

The rise was modestly worse than expected,
with most analysts estimating an increase to 368,000 after claims hit
their lowest level since April 2008 the previous week.

The four-week moving average fell to 375,000, a level last seen in June 2008.





The moving average has dropped 12 per cent in the past six months, and more than 5.0 per cent in a month.

While the rise in initial claims last week interrupted three straight
weeks of declines, the healing in the jobs market remains intact.
Claims remain below the 400,000 mark that is normally associated with an
improvement in labour market conditions.

"The
unemployment claims data continue to signal that the pace of
improvement in the labour market may be gaining momentum," RDQ Economics
analysts said.

The claims numbers were part of a broader
improvement in the overall jobs outlook that could pump up consumer
spending, they said.

"Given the decline in the savings rate in
recent months, stronger job creation is vitally important for the US
consumer," RDQ's John Ryding and Conrad DeQuadros said.

"And
from this and other indications - such as the strongest net jobs
reading in the consumer confidence report since January 2009 - it
appears this improved jobs picture may be falling into place at the end
of 2011."

"We've seen a pretty strong trend in claims
recently. This finally shows they're correcting to a sustainable
downtrend," said Gennadiy Goldberg, interest-rate strategist at 4CAST in
New York.

Speaking of consumer confidence, the US holiday shopping season turned out to be two seasons split by a big lull.

A surge in buying in the two weeks before Christmas coupled with a
record-breaking Black Friday in late November gave retailers a solid
season. The doldrums between the buying binges show how shoppers have
learned to wait for the discounts they know will come.

For Dec
1-24, spending rose 4.7 per cent compared with the same period last
year, according to research firm ShopperTrak. In November, it rose 4.1
per cent. A four per cent increase is considered a successful season.

Consumer spending, including major items such as health care, accounts for 70 per cent of the economy. Agencies