New U.S. claims for unemployment benefits dropped to a nine-month low last week, a government report showed on Thursday, suggesting a labor market recovery was gaining momentum. Initial claims for state unemployment benefits fell 23,000 to a seasonally adjusted 381,000, the Labor Department said, the lowest since late February. Economists had expected a smaller fall, to 395,000. The report, coming after data last week showing a rise in hiring and a sharp drop in the unemployment rate to a 2-1/2-year low of 8.6 percent in November, pointed to some strengthening in a sector that has been the Achilles heel of the economy's recovery. It was the latest sign of acceleration in economic growth in the current quarter after output expanded at a 2.0 percent annual rate in the July-September period. "It looks as if the U.S. labor market does not know how to spell the words euro contagion," said Cary Leahey, economist at Decision Economics in New York. "This is a good report ... adds to the sense that the job market continues to brighten, though very slowly."
