US jobless claims fall to 10-month low

New claims for US unemployment insurance tumbled last week to the lowest level in nearly 10 months, government data showed Thursday in a report suggesting the troubled jobs market is stabilizing. The Labor Department said the number of people filing initial claims for jobless benefits dropped by a sharp 23,000 to 381,000 in the week ending December 3. The better-than-expected claims number was the lowest since the week ending February 26. The Labor Department upwardly revised the prior week's reading by 2,000 to 404,000. The latest report appeared to confirm a downward turn in claims. The four-week moving average last week fell by 3,000 to 393,250, the lowest reading since early April. "The broader picture is now suggesting that jobless claims are beginning to head lower after a period of moving broadly sideways, consistent with the recent improvement in labor market conditions," said Michael Gapen at Barclays Capital. The unemployment rate sank to a 32-month low of 8.6 percent in November as the economy added 120,000 jobs, down from 9.0 percent in October. Sara Kline at Moody's Analytics called the new jobs claims numbers "an encouraging sign," but warned of headwinds coming from Europe, where economic growth is slowing sharply amid a eurozone debt crisis. "Firms are becoming more willing to hold onto existing workers, as renewed profitability and signs the recovery is gaining steam are supporting business confidence," she said, but the outlook has "downside risks, most notably economic worries in Europe." Kline said the world's largest economy was well-positioned to weather a mild European recession, "but a deeper contraction could create drag for the US labor market improvement."