Initial claims filed for unemployment insurance fell to 300,000 in the week ended April 5, the lowest level since May 2007.

Economists expected claims to edge down to 320,000 from the previous week’s upwardly revised 332,000 reading.

Continuing claims filed in the week ended March 29 fell to 2.776 million from an upwardly revised 2.838 million in the previous week.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, warns that the number may have been affected by favourable seasonal adjustments due to the shifting timing of the Easter holiday.

“We’d love to proclaim these numbers as definitive evidence of a real downshift in the trend in claims, but it’s even riskier than usual to put too much weight on single observations at this time of year,” says Shepherdson.

“The shifting date of the Easter holiday from year-to-year causes problems for the seasonal adjustments, so we need to see a few more weeks’ numbers before we can be sure where the trend now stands.”

Nonetheless, Shepherdson acknowledges that the trend is lower.

“Firings are low and that is good news for two reasons,” says Neil Dutta, head of U.S. economics at Renaissance Macro Research.

“First, while the relationship is not perfect, at a minimum, it implies a steady pace of payroll growth. Second, if firings are low, workers are presumably less worried about losing their jobs, which implies a decline in precautionary savings. That’s good news for consumption. But, we know the labour market is not tightening! Give me a break.”

U.S. Treasuries and gold have been giving up gains since the release, and the dollar is advancing.

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