Jobless claims drop to almost a four-year low

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The U.S. labor market got another jolt of good news Thursday when the government reported new claims for jobless benefits dropped to almost the lowest they have been in four years.

The Labor Department said seasonally adjusted claims dropped by 15,000 to 358,000 in the week ended Feb. 4. That's the second lowest level since April 2008, before the financial crisis that sent the U.S. economy into its worst recession since the Great Depression.

The four-week moving average, considered a more accurate reading of the health of the job market, dropped 11,000 to 366,250, also the lowest since April 2008.

"It's great news. Claims continue to look better every week, every month ... the headline number is great," said Frank Lesh, Futures Analyst and broker at Futurepath Trading LLC.

Economists polled by Reuters had forecast claims rising to 370,000. The claims data pointed to building strength in the labor market. The economy has had two straight months of job gains above 200,000 and the unemployment rate dropped to a three-year low of 8.3 percent in January.

Solid employment gains and strong manufacturing activity have prompted analysts to temper their expectations of a sharp slowdown in growth in the first quarter after a brisk 2.8 percent annual pace in the final three months of 2011.

The upbeat data have raised doubts about the Federal Reserve's expectation that it could hold interest rates near zero at least through late 2014 and reduced the odds of a third round of bond buying to spur the recovery.

Last week's decline in both new applications for jobless benefits and the four-week average pushed them closer to the 350,000 mark that economists say would signal sustained labor market strength.

Despite the continued improvement, the labor market recovery still has a long away to go. The number of people still receiving benefits under regular state programs after an initial week of aid rose 64,000 to 3.52 million in the week ended January 28. 

Reuters and The Associated Press contributed to this report.