First time filings for initial jobless benefits dropped back down near seven-year lows last week, according to a weekly report from Washington, lending further credence to a slow and steady recovery for the labor market and the U.S. economy.
The Labor Department said that initial jobless claims, a proxy of weekly layoffs, dropped 1.9 percent to 312,000 in the week ended June 14, narrowly tucking in below economist predictions of 313,000 new claims. Meanwhile, the week’s prior claims were revised slightly upward to show 1,000 more claims than originally estimated.
The four-week moving average, a less volatile measure of jobless trends, declined 1.2 percent to 311,750, marking the fifth time in six weeks that the one-month average dropped lower week-over-week. Economists generally consider claims beneath 350,000 as a sign of an improving labor market.
Continuing claims, a count of the number of people already receiving state benefits, declined by 54,000 to 2.561 million in the week ended June 7. That’s the lowest figure since October 2007. Continuing claims are reported at a one-week lag to initial claims.
Total claims, or the number of people collecting benefits through all state and federal programs, increased by 32,125 to 2.479 million in the week ended May 31. Total claims are calculated at a two-week lag to initial claims. At the same time in 2013, total claims were significantly higher at 4.526 million.
The largest increases in initial claims for the week ending June 7 were in California (+9,935), Florida (+4,050) and Illinois (+3,248). The largest decreases were in New Mexico (-332), Nebraska (-162) and Alaska (-109).
The latest figures are in line with declining unemployment and improving conditions for new jobs in recent months. According to the Labor Department’s monthly non-farms payroll report at the start of June, the nation added 217,000 new jobs in May and the nation’s unemployment rate held at 6.3 percent. So far in 2014, the economy has averaged adding 213,600 new jobs per month, the best clip since 1999. With the rise in hiring in the past four months, the U.S. has now recovered the 8.7 million jobs that were lost during the Great Recession.
The report dovetails nicely with commentary from the Federal Reserve on Wednesday, in which the central bank said it believes the jobs market will continue to improve gradually. The Fed also said that it was continuing its pattern of reducing its monthly asset purchases by $10 billion in June and hinted that interest rate hikes will likely be starting in 2015 as the economy keeps growing.
After a rally yesterday afternoon following a press conference with Fed Chairman Janet Yellen, the markets are taking a breather in Thursday action. The Dow Jones Industrial Average is off by 39 points, the broader S&P 500 is down 3 points and the tech-heavy Nasdaq is lower by 20 points.
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