Jobless claims fell by 15,000 last week

WASHINGTON (Reuters) - The number of U.S. workers applying for unemployment aid fell unexpectedly by 15,000 last week, according to government data on Thursday that could help ease concerns the labor market was deteriorating rapidly.

Initial jobless claims for state unemployment insurance benefits fell to a seasonally adjusted 322,000 in the week ended January 5, from a slightly revised 337,000 the prior week.

Wall Street economists were expecting a slight increase in new claims to 340,000 from the originally reported 336,000 in the week ended December 29.

U.S. government bond prices slightly pared early gains after the surprise drop in claims, with the benchmark 10-year note trading 2/32 higher in price for a yield of 3.82 percent.

The four-week moving average of new claims, which irons out volatility in the week-to-week figures, fell for the second straight week, slipping to 341,000 from 344,000 the prior week.

A Labor Department analyst said there were no special factors behind the surprise decrease and noted that this time of year can be difficult to account for seasonal adjustments. "This is a real tough time of the year for us," he said.

Traditionally, there is a good bit of volatility during the period between Thanksgiving and the observance of civil rights leader Martin Luther King's birthday in mid-January.

The U.S. jobless rate rose to 5 percent last month from 4.7 percent in November, a government report showed on Friday, the largest monthly rise since October 2001, shortly after the September 11 terror attacks.

The report stirred fears the U.S. economy might be falling into a recession, if not already in one, and led financial markets to raise bets that the Federal Reserve would cut interest rates by a hefty half-percentage point at a meeting on January 29-30.

Fed Chairman Ben Bernanke could offer more insight into the likely direction of U.S. interest-rate policy in a speech at 1 p.m. (1800 GMT).

The number of people who remain on the benefit rolls after drawing an initial week of aid dropped by 52,000 to 2.70 million in the week ended December 29, the latest period these figures were available. But that number still remained close to levels reached during 2005 in the aftermath of Hurricane Katrina.

"Perhaps more important given the sharp jump in unemployment in December to 5 percent is the continuing claims series," Joseph Brusuelas, U.S. chief economist at IDEAglobal in New York, said in a research note.

"A move above 3 million is consistent with past recessions and the market will continue to monitor this data closely, as the traditional seasonal volatility works its way out of the series," said Brusuelas.