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Initial jobless claims fell back 6.7% to 334,000 for the week ending July 13, according to a Labor Department report released today.
After rising a revised 4.1% the previous week, analysts had expected a decline in initial claims. However, their 344,000 estimate proved too conservative for this week's drop.
From a more long-term perspective, a 1.5% decline in the four-week moving average to 346,000 initial claims nearly negates the previous week's 1.6% increase. Both the latest week's claims and the four-week average fall significantly below 400,000, a cutoff point that economists consider a sign of an improving labor market.
On a state-by-state basis, five states recorded a decrease of more than 1,000 initial claims for the week ending July 6 (most recent available data). New Jersey dropped the most (-4,370), citing fewer education and transportation & warehousing layoffs as its primary improvement push. California came in second with a 4,270 initial-claims reduction, mostly because of fewer services and manufacturing layoffs.
For the same period, 15 states registered increases of more than 1,000 initial claims. As the Wall Street Journal previously alluded to, special factors such as auto sector retooling and the end of the academic year (i.e. teacher layoffs) could have introduced irregular data into this week's numbers. Manufacturing layoffs helped push Michigan's initial claims up 17,700, while transportation and educational service layoffs helped shoot New York's numbers up 15,160. For all states supplying a comment to the Labor Department, manufacturing and/or educational service layoffs were listed.