The number of Americans filing new claims for unemployment benefits dropped to its lowest level in nearly 5-1/2 years last week, signaling labor market resilience in the face of fiscal austerity.
Continue Reading Below
Initial claims for state unemployment benefits fell 4,000 to a seasonally adjusted 323,000, the lowest level since January 2008, the Labor Department said on Thursday.
Claims for the prior week were revised to show 3,000 more applications received than previously reported.
Economists polled by Reuters had expected first-time applications to rise to 335,000 last week.
The third straight weekly decline in claims pushed them further below the 350,000 mark, which economists normally associate with a firming labor market.
Claims are showing no sign of a pick-up in layoffs even as other parts of the economy such as manufacturing start to show strain from tighter fiscal policy.
A Labor Department analyst said no states had been estimated and there was nothing unusual in the state-level data.
The four-week moving average for new claims, a better gauge of job market trends, dropped 6,250 to 336,750 - the lowest level since November 2007. Coming on the heels of data last week showing surprising strength in the labor market, the claims report could further assuage fears of an abrupt slowdown in the economy.
Employers added 165,000 new jobs to their payrolls in April and hiring in the previous two months was stronger than initially reported. The unemployment rate dropped to a four-year low of 7.5%.
The improvement in employment contrasts sharply with other data, including retail sales and manufacturing, that have suggested a cooling in the economy at the end of the first quarter, which persisted early in the April-June period. The claims report showed the number of people still receiving benefits under regular state programs after an initial week of aid dropped 27,000 to 3.0 million in the week ended April 27. That was the lowest level in so-called continuing claims since May 2008.