REUTERS

(REUTERS)

Weekly Jobless Claims Fall More than Expected

Politics Reuters

The number of Americans claiming first-time unemployment benefits fell for the first time in three weeks, a sign of a healthy labor market.

Initial jobless claims, a proxy for layoffs, fell 15,000 to a seasonally-adjusted 281,000 in the week ended July 11, the Labor Department said Thursday.

Economists surveyed by The Wall Street Journal had expected 285,000 new claims.

Weekly unemployment claims can be volatile, particularly in July, when auto makers shut down factories temporarily for retooling. But they have trended down since 2009 as the labor market recovers from the recession. A four-week moving average designed to smooth over the weekly variations rose 3,250 to 282,500.

The drop in jobless claims comes as other labor-market indicators have remained strong. The unemployment rate fell to 5.3% in June, the Labor Department said earlier this month.

Economists saw in Thursday's report a sign of further tightening in the labor market.

"This morning's jobless claims report was stronger than expected and suggests labor market separations remain at healthy, low levels," Jesse Hurwitz at Barclays said in a note to clients.

Jim O'Sullivan, chief U.S. economist at High Frequency Economics, said the jobless-claims numbers suggest that the unemployment rate will continue dropping.

"The last couple of weeks' data should probably not be taken too literally because of potential seasonal adjustment problems but, even as reported, the data do not suggest any significant change in the trend," he wrote in a note. "The low level of claims is consistent with employment growth remaining more than strong enough to keep the unemployment rate declining."

Fed officials have been paying close attention to the labor market as they mull raising interest rates this year.

In her testimony before the House Financial Services Committee on Wednesday, Fed Chairwoman Janet Yellen expressed optimism in the employment situation.

"Looking forward, prospects are favorable for further improvement in the U.S. labor market and the economy more broadly," she said.

Thursday's report said 296,000 claims were filed the week ended July 4, revising down the earlier estimate of 297,000.

And the number of people filing continuing claims for unemployment benefits declined 112,000 to 2,215,000 in the week ended July 4. Continuing claims are reported with a one-week lag.

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