Unemployment Claims Drop Last Week

New claims by U.S. workers for unemployment benefits dropped last week as help-wanted advertising remained at a high level, the latest signs America’s vibrant economy could push labor costs higher. First-time jobless claims fell a greater-than-expected 8,000 last week to a seasonally adjusted 324,000, a historically low level, Labor Department figures showed. Additionally, the Conference Board, a New York-based business research group, said help-wanted ads in major newspapers last month appeared at a pace that’s been little changed for two years. Low U.S. unemployment and a greater number of jobs than job seekers together suggest that a period of restrained labor costs could be ending. The next reading on labor markets comes Tuesday when the government releases its broadest measure of wages and benefits, the employment cost index. Some economists are predicting that the index will register its biggest increase in four years--a 0.9% gain for the fourth quarter. That’s likely to be viewed by investors and Federal Reserve policymakers as evidence that the kindling for an inflationary fire is stacking up.