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 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.
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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)
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