Two gauges of the U.S. economy showed the number of Americans receiving government jobless benefits dropping, as the private sector started hiring at a faster pace in more than a decade Thursday. The Department of Labor said 372,000 Americans applied to receive unemployment benefits in the week ended December 31. That was a decline of 15,000 from the previous week and an encouraging sign for economists, who say the figure must get below 400,000 and stay there to indicate any real progress is being made in the U.S. job market.
The U.S. unemployment rate currently stands at 8.6 per cent.
The positive government data echoes another closely watched jobs indicator also released Thursday, the private sector jobs report from employment firm ADP.
The company reported Thursday that non-farm employment at private U.S. firms increased by 325,000 from November to December. That's the higher number since ADP began charting the data more than a decade ago.
"With the index representing nearly 400,000 U.S. companies and 24 million employees, this blow-out number marked a 59 per cent increase from the month prior and easily beat forecasts for a 178,000 gain," investment bank Macquarie said in a research note in reaction to the data's release.
While the report is another indication of an improving U.S. labour market, economists observed that the track record of the ADP reports has been uneven.
"It's important to keep in mind that this report is notorious for missing the actual payroll number by wide margins on a month-to-month basis," noted BMO Capital Markets senior economist Robert Kavcic.
"The biggest miss on record was (an overestimation of) 210,000 in November 2008, with four misses of 100-thousand-plus since then."
But others maintained the optimism, despite the index's spotty track record. "Normally ADP can throw off false signals as an indicator for nonfarm private payrolls, but the magnitude of this upside surprise will lead several to revise their calls higher for tomorrow’s [jobs data]," Scotiabank economist Derek Holt said.
Both Canada and the U.S. will release their official jobs data for December on Friday.
