This is the lowest level for initial claims since November 24, 1973 when it was 233,000.
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The sturdy jobs picture together with a strengthening housing market brings the Federal Reserve a step closer to raising interest rates this year.
New jobless claims, a sign of the pace of layoffs, fell to 255,000 in the week through July 18, down 26,000 from the previous week, the Labour Department said Thursday.
In a preview of the data to clients, Wells Fargo’s Sam Bullard wrote: “The annual summer auto plant retooling season is underway and has, as expected, resulted in volatility in the weekly readings of initial jobless claims”.
Earlier this month, the Labor Department released a separate report showing that non-farm payroll employment increased by 223,000 jobs in June, modestly below the addition of 230,000 jobs anticipated by economists. Economists don’t think the U.S. central bank will decide to raise rates next week, but many will be looking for a signal from the Fed that it is preparing for a rate hike in September.
The bigger than expected decrease pulled the unemployment rate down to its lowest level since hitting 5.0 percent in April of 2008.
In this week’s data, the average of new claims over the past month edged down by 4,000 to a seasonally adjusted 282,500.
The four-week moving average of claims has been below the key 300,000 mark, which is normally associated with sturdy job gains, for 17 straight weeks – an unusually long stretch.
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Continuing jobless claims declined by 9,000 to 2.2 million in the week ended July 11.
