Jobless claims at their lowest in six months

WASHINGTON - The number of newly laid-off workers filing claims for unemployment benefits fell sharply last week, to the lowest level in nearly six months.

The Labor Department said yesterday that new applications for jobless claims dropped 26,000, to 299,000, in the week ended Jan. 6 on a seasonally adjusted basis. It was the first time new jobless claims have fallen below 300,000 since the week of July 22.

The improvement was much better than the decline of 9,000 that analysts had been expecting and provided further evidence that the slowing U.S. economy has not begun to seriously affect the labor market outside of specific industries such as housing and auto manufacturing.

But analysts cautioned against reading too much in the latest decline, saying new jobless claims are notoriously difficult to read during holiday periods.

Ian Shepherdson, chief U.S. economist at High Frequency Economics Ltd., of Valhalla, N.Y., predicted a big increase in claims in coming weeks as retail stores lay off temporary workers hired for the holiday shopping season.

The four-week moving average for claims, which smooths out week-to-week volatility, edged down to 314,750, the lowest level since early November.

In Pennsylvania, new claims rose 17,428, to 46,369. New claims in New Jersey were up 6,300, to 19,561. The figures for the states are for the week ended Dec. 30. A total of 28 states and territories had an increase in claims that week, while 25 had declines in claims applications.

While economic growth slowed significantly in the second half of the year, analysts said there were no signs that the economy was threatening to topple into a recession.