WASHINGTON (Reuters) - The number of U.S. workers filing new claims for jobless aid tumbled by 21,000 last week, while the number of people staying on the benefit rolls rose to its highest level in more than two years, a government report on Thursday showed.
First-time claims for state unemployment insurance benefits fell to a seasonally adjusted 336,000 in the week ended December 29, from an upwardly revised 357,000 the prior week, the Labor Department said.
Wall Street economists forecast new claims to drop to 345,000 from the originally reported 349,000 in the week ended December 22.
A Labor Department spokesman attributed much of the steeper decrease in initial claims to the holiday shortened workweek which affected the ability of states to estimate data. "As you can imagine Christmas week is a little bit tricky," he said.
But still, the prior week's upward revision brought claims that week to the highest level since October 2005, the official said.
The four-week moving average of new claims - more reliable because it irons out weekly fluctuations - inched down to 343,750 from 344,500.
But in a sign that people are having difficulty finding work, the number of so-called continued claims rose to its highest since mid-October 2005 when the aftermath of Hurricane Katrina kept workers sidelined.
The number of people remaining on the benefit rolls after drawing an initial week of claims rose for the fourth straight week, climbing to 2.76 million in the week ended December 22, the latest week these figures were available.
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