Jobless Claims Hit 3-Year Low

The number of workers seeking jobless benefits fell in the latest week, the government said Thursday in a sign of economic strength that was bolstered by a private report showing growth in the manufacturing sector.

As initial claims for state unemployment benefits dropped, they pulled the indicator’s four-week average to its lowest level in more than three years, the Labor Department said.

And manufacturing grew for a third straight month in December, a key business group said.

The National Assn. of Purchasing Management, based in Tempe, Ariz., said its purchasing managers index hit 55.9 in December, up from 55 in November. A reading above 50 suggests that the manufacturing sector is expanding.

The group, made up of purchasing managers at major U.S. companies, said that new orders expanded in December at the fastest pace in five years.

“This high rate of growth in new orders, coupled with the low level of inventories and declining prices, should be sufficient to sustain economic growth into 1993,” said Robert Bretz, chairman of the group’s business survey committee.

Meanwhile, the Commerce Department said factory orders fell 0.9% in November after an increase of 2.0% in October, but analysts noted that most of the drop came in the volatile categories of aircraft and defense orders.

“When you take out the large aircraft orders and defense orders, you get a picture of an improving order rate,” said David Wyss of DRI/McGraw-Hill Inc.

The jobless data suggested that unemployment, long a trouble spot for the economy, may have bottomed out, although analysts say more evidence is needed.

The Labor Department said initial claims for state unemployment compensation fell by 28,000, much more than analysts had expected, to a seasonally adjusted 332,000 in the week that ended Dec. 19.

The drop drew the closely watched four-week moving average, considered a more reliable predictor of labor market trends, down to 341,250 new claims, its lowest level since the week that ended Nov. 25, 1989.

“The claims numbers are continuing to tell you the labor market is getting better--there’s no doubt about that,” said Steven Ricchiuto, chief financial economist at BZW Government Securities Inc.

But other analysts disagreed.

“It’s really a dangerous game to play to say the job picture is getting better,” said economist David Resler at Nomura Securities. “We can only say it’s not getting worse.”