The number of people filing for initial unemployment benefits dropped by 42,000, the largest drop in over a year, the Labor Department reported Thursday.
In the week ending Dec. 21, the number of seasonally adjusted jobless claims was 338,000, down from a revised figure of 380,000 the previous week.
The four-week average, a more reliable measure that irons out weekly volatility, increased by 4,250 to 348,000 the Labor Department said.
Economists said the November and December claims figures often show high volatility around the Thanksgiving, Christmas and New Year's holidays.
In the past months, the number of jobless claims has been steadily falling as the labor market gradually improves. The U.S. unemployment rate was 7% in November, down from 7.8% the November before.
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