Initial jobless claims increased 1.5% to 333,000 for the week ending Aug. 3, according to a Labor Department report released today.
After falling a revised 4.9% the previous week, to what was initially a five-year low, this newest report managed to clock in under analysts' expectations of 336,000 claims.
From a more long-term perspective, a 1.8% drop in the four-week moving average to 335,500 initial claims marks the fourth straight week of declining claims, taking that metric to its lowest level since November 2007, the month before the Great Recession began. 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, 12 states recorded a decrease of more than 1,000 initial claims for the week ending July 27 (most recent available data). California's claims dropped a whopping 21,480 due primarily to fewer services layoffs, while fewer wholesale trade layoffs helped push Michigan's numbers down 8,650. Throughout the states, fewer layoffs in the manufacturing sector proved to be a common theme which, according to The Wall Street Journal, originates from the completion of car factory retooling for the year. Not a single state registered an increase of more than 1,000 initial claims.
The unemployment rate fell to a 4½-year low of 7.4% in July, down from 7.6% in June. That is still well above the 5% to 6% associated with a normal economy.
More than 4.5 million people received unemployment aid in the week ending July 20, the latest data available. That's down 174,418 from the previous week. The number of recipients has fallen 21% in the past year.
-- Material from The Associated Press was used in this report.