Jobless Claims Drop to 8.5-Year Low

WASHINGTON (AP) -- The number of people seeking U.S. unemployment benefits fell last week to its lowest level in more than eight years.

Weekly applications for unemployment aid dropped 19,000 to a seasonally adjusted 284,000, the Labor Department said Thursday. That's the lowest reading since February 2006, nearly two years before the Great Recession began.

The four-week average, a less volatile measure, declined 7,250 to 302,000. Claims for jobless aid have been falling for the past three months. Recent reports have coincided with the temporary summer shutdowns of auto plants, yet the impact of those closures is addressed through seasonal adjustments.

Applications are a proxy for layoffs. When employers hold onto their workers, it's a sign of potential income gains, increased hiring and confidence that the economy will grow. The recent drop-off in unemployment benefit applications points to a substantial number of jobs added in July, raising expectations for the monthly employment report to be released Aug. 1.

"All in, it looks like we may be in for another solid payroll report," said Jennifer Lee, a senior economist at BMO Capital Markets.

The decline in people applying for benefits buttresses other reports that the economy is improving.

Employers added 288,000 jobs in June, the fifth straight month of job gains above 200,000. That's the first such stretch since 1999, during the height of the dot-com boom. The unemployment rate has fallen to 6.1%, the lowest since September 2008.

Total layoffs in May dropped below pre-recession levels, the government said in a separate report. Job openings are at their highest level in seven years, while more workers are quitting their jobs. Workers usually quit when they have an offer for a better position or confidence that they can find one.

Still, the job growth has done little to lift wages significantly. Wage growth has barely matched inflation during the economic recovery.

But more people with jobs increases the total number of paychecks, which could boost consumer spending and growth. After a sharp contraction in the economy in the first three months of the year, most economists expect growth to return in the April-June quarter and exceed 3% at an annual pace in the second half of 2014.

Leaked: Apple's next smart device (warning, it may shock you)
Apple recently recruited a secret-development "dream team" to guarantee its newest smart device was kept hidden from the public for as long as possible. And there's one small company making Apple's gadget possible. And its stock price has nearly unlimited room to run for early-in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Read/Post Comments (0) | Recommend This Article (0)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 3042434, ~/Articles/ArticleHandler.aspx, 10/21/2014 6:40:29 AM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement