US jobless claims at 3-12 year low

---

WASHINGTON, Dec 15 (Reuters): The number of Americans filing new claims for jobless benefits dropped to a 3-12 year low last week and factory activity in New York state scaled a seven-month high in December, more evidence of a pick-up in economic activity. Initial claims for state unemployment benefits dropped 19,000 to a seasonally adjusted 366,000, the Labor Department said Thursday. That was the lowest level since May 2008, and confounded economist' expectations for a rise to 390,000. In a separate report, the New York Federal Reserve said its "Empire State" general business conditions index rose to 9.53 - the highest since May - from 0.61 in December. The index was boosted by a strong rebound in new orders and an improvement in hiring. "It all speaks to further stabilisation and a very positive trend in the U.S. economy. Stability in the U.S. economy is going to be a vital part of stabilizing global GDP. This comes in a very good time," said Peter Kenny, managing director at Knight Capital in Jersey City, New Jersey. The unexpected drop in claims last week pushed them closer to the 350,000 mark that analysts say signals labor market strength. It offered further proof of increased momentum in the pace of economic activity, even though retail sales rose modestly in November. This is in sharp contrast to Europe, where the festering debt crisis has already pushed some economies into recession. The Federal Reserve on Tuesday acknowledged the improvement in the jobs market, but said unemployment remained high. The jobless rate dropped to a 2-12 year low of 8.6 percent in November. The U.S. central bank said the debt crisis gripping Europe was a big risk to the U.S. economy, which it described as "expanding moderately".