WASHINGTON -- Fewer Americans signed up for unemployment benefits last week, raising hopes that the nation's job market will show improvement moving into the new year.
New applications for unemployment insurance dropped by a seasonally adjusted 5,000 to 326,000, the lowest level since Dec. 11, the Labor Department reported yesterday. Economists had expected claims to rise to around 335,000.
Anthony Chan, senior economist at JPMorgan Fleming Asset Management, believes slower productivity growth and a solid economic expansion will spur companies to step up hiring.
Employers added 112,000 jobs in November, down from 303,000 in October. Economists, however, are hoping for a pickup in December's payrolls and are forecasting the addition of around 175,000 jobs during the month.
The jobless rate is expected to hold steady at 5.4 percent. The employment report for December will be released by the government next week.
Despite the good news on jobless claims, the Dow Jones industrials lost 28.89 points to close at 10,800.30.
Even with expectations for better job growth for December, factories, which have cut jobs for three months in a row, might show losses for a fourth month, some analysts said.
A barometer of business activity in the Chicago area, a manufacturing center, clocked in at 61.2 in December, down from 65.2 in November, according to the National Association of Purchasing Management-Chicago. An index reading above 50 signals growth.