After weeks of rough jobs data, the labor market received a dose of optimistic news with jobless claims falling by 26,000 filings for the week ending September 22.
Initial jobless claims hit 359,000 last week, down from a revised 385,000 filings a week earlier, the Labor Department said.
Meanwhile, the four-week moving average hit 374,000, a decline of 4,500 filings.
The report ends days of negative economic data in the wake of the Fed’s decision to launch another round of quantitative easing to stimulate job creation.
Despite the steep drop in jobless claims, economists warn the chronically unemployed have stopped looking for work or dropped out of the labor force altogether—factors not considered in the weekly filings.
The total number of Americans receiving benefits through the government’s program hit 5.1 million last week, an 11% decline from the prior week.
Analysts with Econoday called it “the best single week decline since late July.”
The research firm said the drop in claims may be obscured by negative headlines on durable goods and second-quarter gross domestic product, but adds “it should definitely support the Dow through the session.”