News

U.S. jobless claims fall; four-week average hits 8-year low

U.S. jobless claims fall; four-week average hits 8-year low

JOBS: Initial claims for state unemployment benefits decreased by 14,000 to a seasonally adjusted 289,000 for the week ended Aug. 2. Photo: Reuters

By Lucia Mutikani

WASHINGTON (Reuters) – The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, pointing to a further strengthening of labor market conditions.

Initial claims for state unemployment benefits decreased by 14,000 to a seasonally adjusted 289,000 for the week ended Aug. 2, the Labor Department said on Thursday.

The prior week’s claims were revised to show 1,000 more applications received than previously reported.

Economists polled by Reuters had forecast claims rising to 305,000 for the week ended Aug. 2. Volatility related to the summer automobile plant shutdowns for retooling pushed claims to a 14-year low in July.

Most of that volatility has worked its way through the data. The four-week average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 4,000 to 293,500, the lowest level since February 2006.

A Labor Department analyst said there were no special factors influencing the state level data.

“The underlying trend seems to be improvement in payrolls. The slower pace of claims would be consistent with that,” said Stephen Stanley, chief economist at Pierpont Securities in Stamford, Connecticut.

U.S. stock index futures held gains, while prices of U.S. Treasuries turned flat, paring earlier gains, after the claims data. The U.S. dollar was trading higher against the euro.

Claims are now at levels where the scope for further declines is limited as the labor market normalizes. As such, hiring will need to pick up significantly for job growth to accelerate.

The slow pace of layoffs as well as steady hiring are helping to strengthen labor market conditions, fanning speculation of an early interest rate increase from the Federal Reserve.

But with the ranks of the long-term unemployed, discouraged job seekers and part-time workers still large, the U.S. central bank has given little indication it is in a hurry to lift its benchmark interest rate, which it has kept near zero since December 2008.

Fed officials last month acknowledged the improvement in labor market conditions, but said “significant underutilization of labor resources” remained.

Nonfarm payrolls increased by 209,000 in July, marking the sixth straight month that employment expanded by more than 200,000, a stretch last seen in 1997. The unemployment rate rose one-tenth of a percentage point to 6.2 percent as more people entered the labor force in search of work.

Thursday’s jobless claims report showed the number of people still receiving benefits after an initial week of aid dropped by 24,000 to 2.52 million in the week ended July 26.

The unemployment rate for people receiving jobless benefits was 1.9 percent for the fourth week in a row.

(Reporting by Lucia Mutikani; Additional reporting by Richard Leong in New York; Editing by Paul Simao)

Recent Headlines

in Local Sports

Mariners open Cactus League play with win over the Padres

Fresh
Seattle Mariners' Taijuan Walker signs autographs during spring training baseball practice Saturday, Feb. 21, 2015, in Peoria, Ariz.

Tyler Marlette scored the game-winning run on a single by Patrick Kivlehan and a fielding error by Padres right fielder Rymer Liriano.

in Local Sports

MLS minimum: Playing for $36,000 with millionaire teammates

Fresh
Real Salt Lake's Robbie Findley, left, and Seattle Sounders' Zach Scott vie for the ball during the first half of an MLS soccer match, Friday, Sept 12, 2014, in Seattle.

Seattle Sounder Zack Scott speaks out about MLS pay gap

in Local Sports

Former Sonic Ray Allen says he will not play this NBA season

Fresh
WP-HeatRayAllen

Allen out this year, will consider returning in 2015-2016 season

in National

A-Rod singles in first at-bat following drug suspension

Fresh
New York Yankees' designated hitter Alex Rodriguez hits a single in the first inning during a spring training baseball exhibition game against the Philadelphia Phillies, Wednesday, March 4, 2015, in Tampa, Fla.

Mixed reactions from fans in A-Rod's return to baseball

in Sports

Lawyer: Tsarnaev widow not ID’d as witness in bombing trial

Fresh
It this courtroom sketch, U.S. Attorney William Weinreb, left, is depicted delivering opening statements in front of U.S. District Judge George O'Toole Jr., right rear, on the first day of the federal death penalty trial of Boston Marathon bombing suspect Dzhokhar Tsarnaev, Wednesday, March 4, 2015, in Boston. Tsarnaev, depicted seated second from right between defense attorneys Judy Clarke, third from right, and Miriam Conrad, right, is charged with conspiring with his brother to place two bombs near the marathon finish line in April 2013, killing three and injuring 260 people.

Widow has not been contacted by the defense