Jobless Claims Hover Near Lowest Level in Four Decades
Filings for U.S. unemployment benefits are hovering near the lowest levels in four decades, a sign the strong labor market will bolster U.S. growth.
Jobless claims rose by 3,000 to 270,000 in the week ended Aug. 1, a report from the Labor Department showed. The median forecast of 41 economists surveyed by Bloomberg News called for 272,000. The 255,000 reading two weeks earlier was the lowest since November 1973.
Firings are at historically low levels as employers hold on to more workers in response to increased demand following a slump in early 2015. More hiring would help convince Federal Reserve policymakers that the economy can withstand an increase in the benchmark interest rate this year.
“The labor market stands in a fairly healthy position,” said Millan Mulraine, deputy head of research and strategy at TD Securities (USA) in New York. “The economic recovery has regained some positive momentum, and that’s likely to translate into further acceleration in job growth in the next few months.”
Economists’ estimates in the Bloomberg survey ranged from claims of 262,000 to 280,000. The previous week’s figure was unrevised at 267,000.
No states estimated data last week, and there was nothing unusual in the report, according to the Labor Department.
The four-week moving average, a less volatile measure than the weekly numbers, decreased to 268,250 last week from 274,750.
The number of people continuing to receive jobless benefits fell by 14,000 to 2.26 million in the week ended July 25. The unemployment rate among people eligible for benefits held at 1.7%. These data are reported with a one-week lag.
Since early March, claims have remained below the 300,000 level that economists say is typically consistent with an improving job market. This is the longest stretch since 1972.
While job growth is still strong, it has eased from the beginning of the year. Companies in the United States added 185,000 workers to payrolls in July, after a revised 229,000 increase in June, figures from the ADP Research Institute in Roseland, New Jersey, showed Aug. 5.
A Labor Department report on Aug. 7 is projected to show employers, including government agencies, added 225,000 workers last month, while the jobless rate held at a seven-year low of 5.3%.
Fed policymakers last week said they’d like to see some additional improvement in the labor market before they decide to raise the benchmark interest rate for the first time since 2006. The majority of economists surveyed by Bloomberg News in July favored a September lift-off.
