US jobless claims fall, focus now on nonfarm payrolls

US jobless claims figures dropped last week and job cuts declined sharply in December, indicating that the labor market is tightening.

According to a report released by the US Labor Department, the number of Americans filing new claims for unemployment benefits fell by 4,000 to a seasonally adjusted 294,000 for the week ended January 3, the said.

This was however a bit less than expectations of a drop to 290,000 but the data on Thursday supports support views of faster growth this year, driven by consumer spending, despite a faltering global economy..

Labor market conditions continue to improve, providing support for consumers and contributing to a virtuous cycle for the economy. Focus now turns to the all-important US nonfarm payrolls in the US session on Friday.

A stronger US job market raises speculation that the Federal Reserve would be pushed to raising its short-term interest rate sooner. The benchmark rate has been kept near zero since December 2008. Expectations of a rate hike will be supportive for the US dollar.

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