THE number of Americans filing new claims for jobless benefits fell to a 14-year low last week and industrial output rose sharply in September, positive signals that helped ease fears over the economic outlook.

    Initial claims for state unemployment benefits dropped 23,000 to 264,000, the lowest level since 2000, the U.S. Labor Department said Friday.

    A separate report from the Federal Reserve showed production at the nation’s factories, mines and utilities advanced a larger-than-expected 1 percent last month, the biggest gain since November 2012.

    The data offered evidence the economy remained on solid ground, with the labor market gaining steam. Investors in recent days have come to the view that slowing growth overseas will weigh on the U.S. economy and force the Fed to delay a hike in interest rates, with weak retail sales data helping to fuel a global sell-off in stock markets.

    The jobless claims report, however, reinforced expectations that slack in the labor market was being reduced and, combined with comments from a top Fed official, put a brake on the selling on Wall Street.

    “Have we achieved full employment? Not yet. Are we getting closer? Absolutely,” said Stephen Stanley, economist at Amherst Pierpont Securities.

    Some of last week’s drop in claims may have been related to the Columbus Day holiday, economists at RBS told clients.

    The government, however, said there were no unusual factors in the report, and a four-week moving average of claims, which irons out weekly volatility, also fell to its lowest since 2000.

    A Reuters poll published Friday showed economists still clinging to the view that the Fed would raise benchmark borrowing costs from near zero in the second quarter of next year despite mounting signs of weakness overseas.

    The poll, however, was largely completed before the latest stock market sell-off, which has been accompanied by a big shift in investor expectations for the path of U.S. monetary policy. Interest rate futures now point to a rate hike in October 2015.

    St. Louis Federal Reserve Bank President James Bullard said that the U.S. central bank might want to keep its bond-buying stimulus program running for longer than anticipated to combat the risk of a drop in already low inflation, comments that eased investors’ nerves.(SD-Agencies)