Initial jobless claims dropped 5.5% to 326,000 for the week ending July 27, according to a Labor Department report released today, the lowest number since January 2008.
After increasing a revised 2.7% the previous week, this newest report was a pleasant surprise for analysts, who had expected initial claims to hover around 345,000.
From a more long-term perspective, a 1.3% drop in the four-week moving average to 341,250 initial claims continues its downward trend for the third straight week. 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, a whopping 22 states recorded a decrease of more than 1,000 initial claims for the week ending July 20 (most recent available data). Fewer transportation and construction layoffs helped New York knock 14,970 initial claims off its books, while Pennsylvania listed fewer construction layoffs as the primary reason behind its 8,820 drop. Alabama (-6,020) and Georgia (-5,500) have manufacturing to thank for their initial-claims dips, as do at least five other states.
For the same period, California was the only state to register an increase of more than 1,000 initial claims. The Golden State pointed to services layoffs as the chief culprit behind its 7,720-initial-claim hike.
The total number of Americans receiving unemployment benefits fell below 4.7 million for the week that ended July 13, down from nearly 6 million a year earlier.
-- Material from The Associated Press was used in this report.