The number of Americans filing for unemployment benefits rose more than expected last week, but the underlying trend continued to point to sustained labor market strength.
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Initial claims for state unemployment benefits increased 14,000 to a seasonally adjusted 266,000 for the week ended July 23, the Labor Department said on Thursday. Claims for the prior week were revised to show 1,000 fewer applications received than previously reported.
Economists polled by Reuters had forecast initial claims rising to 260,000 in the latest week. Claims have now been below 300,000, a threshold associated with a healthy labor market, for 73 consecutive weeks, the longest stretch since 1973.
The claims data tends to be volatile around this time of the year when automobile manufacturers normally idle assembly lines for retooling. Some, however, often keep production running, which can throw off the model the government uses to strip out seasonal fluctuations from the data.
A Labor Department analyst said there were no special factors influencing last week's claims data and only claims for Hawaii and Puerto Rico had been estimated.
The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 1,000 to 256,500 last week, the lowest level since April.
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The Federal Reserve said on Wednesday the labor market had "strengthened" and that nonfarm payrolls and other job market measures pointed to some "increase in labor utilization in recent months." The U.S. central bank left interest rates unchanged amid concerns over persistently low inflation.
The economy added 287,000 jobs in June, the largest increase this year. Labor market strength is fueling consumer spending, which in turn is spurring faster economic growth.
According to a Reuters survey of economists, the government is expected to report on Friday that gross domestic product increased at a 2.6 percent annual rate in the second quarter after rising at a 1.1 percent pace in the January-March period.
Thursday's claims report showed the number of people still receiving benefits after an initial week of aid increased 7,000 to 2.14 million in the week ended July 16. The four-week average of the so-called continuing claims fell 7,000 to 2.14 million, the lowest level since November 2000.
The continuing claims report covered the survey week for July's unemployment rate. The four-week average of continuing claims fell 9,750 between the June and July survey periods.
That, together with a survey on Tuesday showing an improvement in households' perceptions of labor market conditions, suggests the unemployment rate could decline this month after rising two-tenths of a percentage point to 4.9 percent in June.
(Reporting by Lucia Mutikani; Editing by Paul Simao)