Initial jobless claims fell 1% to 302,000 for the week ending July 12, according to a Labor Department report released today.
After falling a revised 3.2% the previous week, analysts were pleasantly surprised by this latest report, having expected claims to actually increase around 5,000 to 310,000.
From a more long-term perspective, a 1% decline in the four-week moving average to 309,000 initial claims offers a steadier trend of optimism. This is the second report in a row that the four-week average has dipped 1%. 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 5 (most recent available data). California claimed the largest drop in initial claims, citing fewer services sector layoffs as the primary reason for the improvement.
For the same period, 9 states and Puerto Rico registered increases of more than 1,000 initial claims. Michigan took the unfortunate title for biggest boost. In a switcheroo with California, the Great Lakes State pointed to services layoffs as the main cause of its 9,820 initial claims increase.
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