U.S. Jobless Filings Stay Near Lows

The number of Americans filing first-time claims for unemployment benefits fell last week, staying close to a three-year low and supporting the Federal Reserve’s view that the labor market is on the mend.

Initial jobless claims fell by 1,000 last week to 342,000, the Labor Department said Thursday. Claims at the end of last year reached 339,000, the lowest since January 2001.

The number of people continuing to collect state jobless benefits in the week ended Jan. 17 rose by 11,000 to 3.13 million. The four-week average of continuing claims fell by 40,750 to 3.16 million, the lowest since 3.14 million in the week ended Aug. 25, 2001.

A slowdown in wages and benefits held labor costs in the fourth quarter to the smallest increase in a year, the Labor Department reported, underscoring the Fed’s statement that it can be “patient” before raising interest rates.

Fed policymakers Wednesday said in holding their benchmark interest rate at 1% that inflation was “quite low” and that statistics such as jobless claims “suggest an improvement in the labor market.”

The rise in the employment cost index, a gauge of labor expenses for businesses and government, was the smallest since a similar increase in the final three months of 2002. It climbed 1% in the third quarter. Benefit costs rose 1.2% from October through December, the smallest since a similar rise in the 2002 third quarter, while wages and salaries edged up 0.5%, the government said.

Employment costs climbed 3.8% over the last 12 months, compared with a 3.9% gain in the year through the third quarter. Wages and salaries in the fourth quarter were 2.9% higher than a year earlier.

Benefit costs, including severance, health insurance and vacation pay, jumped 6.3% over the last 12 months.