The Labor Department said first-time jobless claims fell by 17,000 last week to 320,000, and the four-week moving average of claims is now close to a level where it was prior to the hurricanes.

"This is a sign the economy has weathered the shock of the hurricanes with flying colors," said Joe Lavorgna, chief U.S. economist at Deutsche Bank, who is forecasting that the holiday shopping season for retailers will be better than expected.

In other economic news, the Commerce Department said that construction spending rose 0.7 percent in October to an all-time high of $1.13 trillion at a seasonally adjusted annual rate. That followed a more modest 0.2 percent September increases and was propelled by gains in residential and public construction, both of which rose to record highs. Building activity may slow in coming months, however, as rising mortgage rates dampen the red-hot housing market.

Such increases have not taken off yet, though, as rates on 30-year mortgages fell for a second consecutive week.

Mortgage giant Freddie Mac reported in its weekly survey Thursday that rates on 30-year, fixed-rate mortgages averaged 6.26 percent this week, down from 6.28 percent last week. Rates on 15-year, fixed-rate mortgages, a popular choice for refinancing a home mortgage, averaged 5.81 percent this week, unchanged from last week.