WASHINGTON The number of Americans filing new applications for unemployment benefits last week fell to its lowest level in more than 41-1/2 years, suggesting the labor market maintained a solid pace of job growth in July. The Labor Department reports on the number of people who applied for unemployment benefits during the week ending July 18 on Thursday, July 23, 2015. The median forecast of 47 economists surveyed by Bloomberg called for 278,000.
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Even so, the claims data supported the fall in the overall unemployment rate last month to 5.3 per cent, the lowest level since April 2008.
Combined with a steady amount of hiring across most states, the improvement will help to sustain spending by households, which represents the largest part of the economy.
Since March, claims have fallen below the level of 300,000, which economists say typically is consistent with a job market that is improving.
Claims were estimated for Puerto Rico last week, the Labor Department spokesman also said. If the data were adjusted for the growth of the U.S. population since then, last week’s figure would likely be an all-time low… That pushed up applications in the previous two weeks. In an environment of accelerating employment growth, many weekly layoffs may also reflect company- or industry-specific causes, such as cost cutting or business restructuring, rather than underlying labor-market trends.
Though the four-week average of claims increased 1,500 between the June and July survey periods, payroll growth likely remained above the 200,000 threshold this month.
Federal Reserve policy makers, considering raising interest rates later this year for the first time since 2006, have noted the labor market is making strides while pointing out that some slack remains. The economy added 223,000 jobs in June, and the unemployment rate fell to a seven-year low of 5.3 per cent.
“We believe that retooling shutdowns were likely much smaller in 2015 than in previous years due to lower auto inventories and very strong vehicle sales”, said Cheng Chen, an economist at TD Securities in New York.
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In a separate report, the Conference Board said its Leading Economic Index rose 0.6 percent last month after advancing 0.8 percent in May.
