07.12.201722:52:00UTC+00U.S. Jobless Claims Drops for 3rd Consecutive Week

The number of Americans filing for jobless benefits suddenly dropped last week, which indicates a tightening of the labor market that supports expectations the U.S. Federal Reserve will hike interest rates next week.

According to the Labor Department, initial claims for state unemployment benefits fell 2,000 to a seasonally adjusted 236,000 for the week ended Dec. 2. It was the third consecutive weekly drop in claims.

A separate report showed layoffs announced by U.S.-based employers increasing to a seven-month peak in November. The overall trend in job cuts remain low.

The labor market is near full employment, with the jobless rate at a 17-year low of 4.1 percent. Labor market tightness is seen encouraging the Fed to hike interest rates at the Dec. 12-13 policy meeting.

The unemployment rate is forecast unchanged in November. It has dropped by seven-tenths of a percentage point in 2017.

The claims report also showed the number of people receiving benefits after an initial week of aid dropped 52,000 to 1.91 million in the week ended Nov. 25. The four-week moving average of the so-called continuing claims rose 1,000 to 1.91 million.