The number of Americans filing for unemployment benefits dropped sharply last week, dropping to its lowest level in seven years.
U.S. jobless claims fell by 24,000 to 297,000 for the week ending May 10, which is much lower than the 320,000 claims economists polled by Bloomberg had estimated. This is the lowest level seen since May 12, 2007.
The Labor Department did revise its figures up by 2,000 to 321,000 for the previous week. The four-week average dropped 2,000 to 323,250.
Jobless claims are now at pre-recession levels and with reduced firings and stronger payrolls the labor market seems to be recovering after the slow start to the year. Payrolls have rebounded in April after the harsh winter weather but companies are still being cautious as they await a pickup in consumer spending, which accounts for two-thirds of the U.S. economy.
Original headline: U.S. jobless claims drop as hiring increases
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