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Initial claims for state unemployment benefits dropped 8,000 to
a seasonally adjusted 221,000 for the week ended June 29, the
Labor Department said on Wednesday. Data for the prior week was
revised to show 2,000 more applications received than previously
reported.
Economists polled by Reuters had forecast claims dropping to
223,000 in the latest week. The Labor Department said only
claims for Virginia were estimated.
Claims data could become volatile in the coming weeks as auto
manufacturers temporarily shut down assembly plants for summer
retooling. Companies implement the plant closures at different
times, which can throw off the model the government uses to
remove seasonal fluctuations from the data.
Claims continue to be watched for signs of an increase in
layoffs stemming from trade tensions between the United States
and China. Rising risks to economic growth from the trade war,
and low inflation, prompted the Federal Reserve to signal last
month interest rate cuts as early as at its July 30-31 meeting.
The four-week moving average of initial claims, considered a
better measure of labor market trends as it irons out
week-to-week volatility, rose 500 to 222,250 last week.
The claims data has no bearing on June's employment report,
which is scheduled for release on Friday. Nonfarm payrolls
probably increased by 160,000 jobs last month after rising by
only 75,000 in May, according to a Reuters survey of economists.
The unemployment rate is forecast unchanged near a 50-year low
of 3.6% in June for a third straight month.
The economy is slowing as last year's massive stimulus from tax
cuts and more government spending fades.
Manufacturing is struggling, the trade deficit is widening
again, consumer confidence is ebbing and the housing sector
remains mired in a soft patch.
The Atlanta Fed is forecasting gross domestic product to rise at
a 1.5% annualized rate in the April-June quarter. The economy
grew at a 3.1% pace in the first quarter following a temporary
boost from exports and an accumulation of inventory.
Thursday's claims report also showed the number of people
receiving benefits after an initial week of aid fell 8,000 to
1.69 million for the week ended June 22. The four-week moving
average of the so-called continuing claims slipped 1,750 to 1.69
million.
(Reporting By Lucia Mutikani; Editing by Andrea Ricci) ((Lucia.Mutikani@thomsonreuters.com;
1 202 898 8315; Reuters Messaging: lucia.mutikani.
thomsonreuters.com@reuters.net)
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