Washington: The number of Americans filing new claims for unemployment benefits unexpectedly fell last week, pointing to a further strengthening of labour market conditions.
Initial claims for state unemployment benefits decreased by 14,000 to a seasonally adjusted 289,000 for the week ended August 2, the Labour 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 August 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 labour market trends as it irons out week-to-week volatility, fell 4,000 to 293,500, the lowest level since February 2006.
A Labour 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.
US stock index futures held gains, while prices of US Treasuries turned flat, paring earlier gains, after the claims data. The US dollar was trading higher against the euro.
Claims are now at levels where the scope for further declines is limited as the labour market normalises. 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 labour 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 US 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.
Fed officials last month acknowledged the improvement in labour market conditions, but said “significant underutilisation of labour 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 per cent as more people entered the labour 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 per cent for the fourth week in a row.