Smart. Sharp. Funny. Fearless.
Thursday, October 20, 2016

By Lucia Mutikani

WASHINGTON (Reuters) — The number of Americans filing new applications for unemployment benefits last week fell to its lowest level in more than 41.5 years, suggesting the labor market maintained a solid pace of job growth in July.

The sturdy jobs picture together with a strengthening housing market brings the Federal Reserve a step closer to raising interest rates this year.

Initial claims for state unemployment benefits declined 26,000 to a seasonally adjusted 255,000 for the week ended July 18, the lowest level since November 1973, the Labor Department said on Thursday. Claims for the prior week were unrevised.

However, last week’s drop likely exaggerates the strength of the labor market as claims are volatile during summer when automakers usually shut assembly plants for annual retooling.

Some firms keep production lines running, which throws off a model the government uses to smooth the data for seasonal variations. A Labor Department analyst said there were no special factors influencing the data.

Still, the decline unwound the increase in claims in June.

The dollar pared losses against a basket of currencies, while prices for U.S. government debt fell. Most economists expect the U.S. central bank will hike interest rates in September. The Fed has kept its short-term lending rate near zero since December 2008.

The four-week moving average of claims, considered a better measure of labor market trends as it irons out week-to-week volatility, fell 4,000 to 278,500 last week.

The claims data covered the survey week for the nonfarm payrolls portion of July’s employment report.

Though the four-week average of claims increased 1,500 between the June and July survey periods, payroll growth likely remained above the 200,000 threshold this month.

The four-week moving average of claims has been below the key 300,000 mark, which is normally associated with sturdy job gains, for 17 straight weeks – an unusually long stretch.

Payrolls increased 223,000 in June after rising 254,000 in May. Job growth has exceeded 200,000 in 14 of the last 16 months and at 5.3 percent, the unemployment rate is close to the 5 percent to 5.2 percent range that most Fed officials consider consistent with full employment.

Thursday’s claims report showed the number of people still receiving benefits after an initial week of aid fell 9,000 to 2.21 million in the week ended July 11.

(Reporting by Lucia Mutikani; Editing by Andrea Ricci)

Photo: A job-seeker completes an application at a career fair held by civil rights organization National Urban League as part of its annual conference, in Philadelphia July 25, 2013.  REUTERS/Mark Makela 

  • candace.hardison
  • Dominick Vila

    Lies! Lies! Chant the GOP partisans who are convinced that President Obama’s policies did not preclude the U.S. economy from collapse, that the stock market DOW Index is a meaningless measure of economic prosperity, and that low unemployment is just a chimera because they know someone in Peoria who has not been able to find a job, and has no choice but to play Halo all day long.

    • BillP

      You are right, there are trolls on this site who claim the President has done nothing to improve the economy, the job market, health care, the value of the US dollar, etc. Such a bad president!

      • bobnstuff

        It’s so bad under Obama that I left my job, I retired just like my Dad did at my age. Now I’m driving my wife crazy.

        • BillP

          bob I’m planning to do the same in a year or two. I already drive my wife a little crazy now.

    • 788eddie

      Hey, Dominick, what duh ya mean?

      I’m sure it’s been broadcast all over the Fox network by now, and every commentator has been extolling the Obama administration for their good efforts.

      (tongue so far in-cheek, it’s gonna hurt for a week).

      • Dominick Vila

        Hannity, Coulter, Limbaugh and the rest of the gang may not appreciate the humor…

    • Independent1

      One of the big issues that the right-wing trolls love to bring up is the decline
      in the “labor participation rate”. And I think I’ve finally found the missing link. Many analysts seem to be wrestling with why so many Americans seem to have dropped out of the labor market in the 45-60 age group and are no longer seeking jobs.

      I think what it is, is that since Reagan convinced corporations to focus on the bottom line and that pleasing stock holders was more important than doing the right thing for their employees; companies over the last 30 years or so have been dumping their older employees either so they wouldn’t earn retirement benefits, or because their salaries had gotten so high, corporate management chose to replace them with someone younger that they could pay less.

      So what I think America has now, is a growing block of 45-62 year olds, who have been replaced at an age that it’s tough to get another job, especially one that pays the money you’ve become accustomed to; especially since over the past decade or so companies have been increasingly hiring part timers they could pay less and not give benefits.

      I think a big chunk of these 45-62 year olds have figured out they’re no longer marketable for another job and have found ways to get by without re-entering the labor force. While a lot of them are also probably living in red states and are sucking all those welfare dollars that right-wingers claim are what ‘libruls just love to do’.

      • Dominick Vila

        A person close to me lost his $200K a year job with a major U.S. corporation 3 or 4 years ago. He was replaced by a young legal immigrant from India who made less than half what my relative made. My relative did not give up. He started his own business, and when progress became too much, and income unstable, as a result of the Great Recession, he looked for a job and after a few months he found one.
        The GOP’s tendency to support corporate welfare and ignore their abuses, and then blame Democrats for the consequences of their policies, is the epitome of hypocrisy.

  • Insinnergy

    Wow… this is really going to upset the GOP trolls.